The easiest way to invest in stocks is to buy exchange traded funds. But you can dramatically increase your returns by choosing above-average stocks. Namely, the Australia and New Zealand Banking Group Limited The stock price (ASX: ANZ) is 16% higher than a year ago, far better than the market yield of around 9.8% (excluding dividends) over the same time period. If he can maintain this outperformance over the long term, investors will do very well! Long-term returns have not been so good, with the share price only 5.1% higher than it was three years ago.

So let’s take a look at the underlying fundamentals over the past year and see if they’ve moved in step with shareholder returns.

Check out our latest analysis for the Australian and New Zealand banking group

To quote Buffett, “Ships will sail around the world but the Flat Earth Society will thrive. There will continue to be wide spreads between price and value in the market … ‘An imperfect but straightforward way to examine how a company’s market perception has changed is to compare the evolution of earnings per share (BPA) with the price movement action.

Over the past year, the Australian and New Zealand banking group increased earnings per share (EPS) by 68%. It’s fair to say that the 16% share price gain has not kept pace with the growth in EPS. It therefore seems that the market has cooled on the Australian and New Zealand banking group, despite the growth. Interesting.

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

ASX: ANZ Growth in earnings per share on December 3, 2021

We know the Australian and New Zealand banking group has improved its results lately, but will it increase its revenues? This free A report showing analysts’ revenue forecasts should help you determine if EPS growth can be sustained.

What about dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. While the share price return reflects only the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital increase or spin-off. updated. It’s fair to say that the TSR gives a more complete picture of dividend paying stocks. In the case of the Australian and New Zealand banking group, it has a TSR of 22% for the past year. This exceeds its share price return that we mentioned earlier. And there’s no price guessing that dividend payments largely explain the discrepancy!

A different perspective

We are pleased to report that the Australian and New Zealand shareholders of the banking group received a total shareholder return of 22% over one year. And that includes the dividend. As the 1-year TSR is better than the 5-year TSR (the latter standing at 3% per year), it seems that the performance of the stock has improved in recent times. Someone with an optimistic outlook might view the recent improvement in TSR as indicating that the business itself is improving 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. Concrete example: we have spotted 1 warning sign for the Australian and New Zealand banking group you must be aware.

If you like to buy stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on AU stock exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.