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Is Delta Plus Group's (EPA:DLTA) 273% Share Price Increase Well Justified?

Simply Wall St

When you buy a stock there is always a possibility that it could drop 100%. But when you pick a company that is really flourishing, you can make more than 100%. Long term Delta Plus Group (EPA:DLTA) shareholders would be well aware of this, since the stock is up 273% in five years. Meanwhile the share price is 1.3% higher than it was a week ago.

See our latest analysis for Delta Plus Group

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over half a decade, Delta Plus Group managed to grow its earnings per share at 24% a year. So the EPS growth rate is rather close to the annualized share price gain of 30% per year. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Indeed, it would appear the share price is reacting to the EPS.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

ENXTPA:DLTA Past and Future Earnings, October 19th 2019

We know that Delta Plus Group has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Delta Plus Group's TSR for the last 5 years was 306%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Delta Plus Group shareholders gained a total return of 0.7% during the year. But that return falls short of the market. On the bright side, the longer term returns (running at about 32% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. Is Delta Plus Group cheap compared to other companies? These 3 valuation measures might help you decide.

We will like Delta Plus Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.