MK Land Holdings Berhad (KLSE:MKLAND) investors are up 14% over the past week, but earnings have fallen over the past five years

Shareholders may be concerned about the fact that MK Land Holdings Berhad (KLSE:MKLAND) share price is down 13% in the past month. But on the bright side, the stock is up over the five-year period. Unfortunately, its return of 14% is lower than the market return of 28%.

Given the strong performance over the past 7 days, let’s take a look at what role the company’s fundamental metrics have played in generating long-term returns for shareholders.

See our latest analysis for MK Land Holdings Berhad

While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just fundamental business performance. One imperfect but simple way to consider how the market’s perception of a company has changed is to compare the change in earnings per share (EPS) with the change in the share price.

MK Land Holdings Berhad’s earnings per share fell 6.3% year-on-year despite strong share price performance over five years.

A sharp decline in earnings per share suggests that the market is not evaluating the company based on EPS. Falling EPS does not correlate with share price growth, so it is worth looking at other metrics.

Meanwhile, revenue growth of 3.7% per year is probably seen as evidence that MK Land Holdings Berhad is growing, which is really positive. In this case, the company may be sacrificing current earnings per share to fuel growth.

The company’s revenues and profits (over time) are shown in the chart below (click to see the exact numbers).

Balance sheet strength is key. It’s worth taking a look at our free a report on changes in the financial position of a company over time.

What about total shareholder return (TSR)?

Investors should note that there is a difference between MK Land Holdings Berhad’s Total Shareholder Return (TSR) and the share price change that we discussed above. The TSR is a return calculation that includes the value of cash dividends (assuming that any dividend received was reinvested) plus the calculated value of any discounted capital raisings and spin-offs. MK Land Holdings Berhad’s TSR of 23% over 5 years exceeded the share price return because the company paid dividends.

Another perspective

MK Land Holdings Berhad has delivered a TSR of 2.6% over the last twelve months. But that was below the market average. On the bright side, the long-term returns (around 4% per year, over half a decade) look better. It may be worth looking into this business, given the continued positive market sentiment over time. While it is worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we have seen: 2 warning signs for MK Land Holdings Berhad you should know.

If you would rather check out another company – one with potentially better financial results – don’t miss this opportunity free list of companies that have proven they can increase profits.

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

Have an opinion on this article? Concerned about the content? Contact us with us directly. You can also email us at editorial-team (at) simplywallst.com.

This Simply Wall St article is for general information purposes only. Our commentary is based solely on historical data and analyst forecasts, and is based on an objective methodology. Our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.