Stock pickers are generally looking for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a significant boost. For example, the Straumann Holding AG (VTX:STMN) share price is up 98% in the last 5 years, clearly besting the market return of around 12% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 12% , including dividends .

Since the stock has added CHF1.4b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Straumann Holding

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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, Straumann Holding managed to grow its earnings per share at 6.6% a year. This EPS growth is slower than the share price growth of 15% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth. This optimism is visible in its fairly high P/E ratio of 51.25.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It is of course excellent to see how Straumann Holding has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Straumann Holding's financial health with this free report on its balance sheet.

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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Straumann Holding the TSR over the last 5 years was 104%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

We're pleased to report that Straumann Holding shareholders have received a total shareholder return of 12% over one year. That's including the dividend. Having said that, the five-year TSR of 15% a year, is even better. It's always interesting to track share price performance over the longer term. But to understand Straumann Holding better, we need to consider many other factors. Even so, be aware that Straumann Holding is showing 1 warning sign in our investment analysis , you should know about...