Investors in Marks and Spencer Group (LON:MKS) have seen notable returns of 71% over the past year
Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Marks and Spencer Group plc (LON:MKS) share price is 70% higher than it was a year ago, much better than the market return of around 3.6% (not including dividends) in the same period. So that should have shareholders smiling. Also impressive, the stock is up 56% over three years, making long term shareholders happy, too.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
Check out our latest analysis for Marks and Spencer Group
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Marks and Spencer Group was able to grow EPS by 29% in the last twelve months. This EPS growth is significantly lower than the 70% increase in the share price. This indicates that the market is now more optimistic about the stock.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that Marks and Spencer Group has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
It's good to see that Marks and Spencer Group has rewarded shareholders with a total shareholder return of 71% in the last twelve months. And that does include the dividend. That gain is better than the annual TSR over five years, which is 0.3%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Marks and Spencer Group better, we need to consider many other factors. Even so, be aware that Marks and Spencer Group is showing 1 warning sign in our investment analysis , you should know about...
But note: Marks and Spencer Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
