Ideally, your overall portfolio should beat the market average. But in any portfolio, there will be mixed results between individual stocks. So we wouldn't blame long term Great Eastern Holdings Limited (SGX:G07) shareholders for doubting their decision to hold, with the stock down 32% over a half decade.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for Great Eastern Holdings

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

During the five years over which the share price declined, Great Eastern Holdings' earnings per share (EPS) dropped by 2.1% each year. Readers should note that the share price has fallen faster than the EPS, at a rate of 8% per year, over the period. So it seems the market was too confident about the business, in the past. The less favorable sentiment is reflected in its current P/E ratio of 8.32.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into Great Eastern Holdings' key metrics by checking this interactive graph of Great Eastern Holdings'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). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Great Eastern Holdings the TSR over the last 5 years was -21%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that Great Eastern Holdings shareholders have received a total shareholder return of 3.3% over one year. And that does include the dividend. That certainly beats the loss of about 4% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. For instance, we've identified 2 warning signs for Great Eastern Holdings (1 is concerning) that you should be aware of.