U.S. markets close in 5 hours 7 minutes
  • S&P 500

    4,597.27
    +30.79 (+0.67%)
     
  • Dow 30

    35,845.04
    +103.89 (+0.29%)
     
  • Nasdaq

    15,383.67
    +156.96 (+1.03%)
     
  • Russell 2000

    2,318.06
    +5.42 (+0.23%)
     
  • Crude Oil

    84.07
    +0.31 (+0.37%)
     
  • Gold

    1,788.20
    -18.60 (-1.03%)
     
  • Silver

    24.07
    -0.53 (-2.14%)
     
  • EUR/USD

    1.1609
    -0.0005 (-0.05%)
     
  • 10-Yr Bond

    1.6410
    +0.0060 (+0.37%)
     
  • GBP/USD

    1.3797
    +0.0028 (+0.20%)
     
  • USD/JPY

    114.2360
    +0.5370 (+0.47%)
     
  • BTC-USD

    62,043.35
    -1,163.58 (-1.84%)
     
  • CMC Crypto 200

    1,489.21
    -15.94 (-1.06%)
     
  • FTSE 100

    7,269.94
    +47.12 (+0.65%)
     
  • Nikkei 225

    29,106.01
    +505.60 (+1.77%)
     

Did You Participate In Any Of DRDGOLD's (NYSE:DRD) Incredible 734% Return?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

It might be of some concern to shareholders to see the DRDGOLD Limited (NYSE:DRD) share price down 21% in the last month. But that doesn't undermine the fantastic longer term performance (measured over five years). In fact, during that period, the share price climbed 616%. Impressive! Arguably, the recent fall is to be expected after such a strong rise. But the real question is whether the business fundamentals can improve over the long term.

It really delights us to see such great share price performance for investors.

Check out our latest analysis for DRDGOLD

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Over half a decade, DRDGOLD managed to grow its earnings per share at 37% a year. This EPS growth is lower than the 48% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
earnings-per-share-growth

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of DRDGOLD's earnings, revenue and cash flow.

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. We note that for DRDGOLD the TSR over the last 5 years was 734%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that DRDGOLD shareholders have received a total shareholder return of 147% over the last year. And that does include the dividend. That's better than the annualised return of 53% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for DRDGOLD you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.