Asset formula

Earnings growth exceeded the remarkable 62% return offered to shareholders of UTI Asset Management (NSE: UTIAMC) over the past year

Shareholders might be concerned that the UTI Asset Management Company Limited (NSE: UTIAMC) share price down 17% over the past month. But that does not change the fact that in twelve months, the title has behaved very well. During this period, we have seen the stock easily outperform the market return, gaining 59%.

After a strong gain last week, it’s worth seeing if longer-term returns have been driven by improving fundamentals.

Discover our latest analysis for UTI Asset Management

Although the efficient markets hypothesis continues to be taught by some, it has been proven that markets are dynamic systems that are too reactive and that investors are not always rational. An imperfect but simple way to examine how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.

Over the past year, UTI Asset Management has increased its earnings per share (EPS) by 83%. It’s fair to say that the 59% share price gain hasn’t kept pace with EPS growth. So it looks like the market has cooled down on UTI Asset Management, despite the growth. Interesting.

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

NSEI: UTIAMC Earnings Per Share Growth February 14, 2022

We know that UTI Asset Management has recently improved its results, but will it increase its income? Check if analysts believe that UTI Asset Management will increase its revenue in the future.

What about dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price performance. TSR is a calculation of return that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of all discounted capital raisings and spinoffs. So for companies that pay a generous dividend, the TSR is often much higher than the stock price return. Note that for UTI Asset Management the 1-year TSR was 62%, which is better than the share price return mentioned above. And there’s no price guessing that dividend payouts largely explain the divergence!

A different perspective

UTI Asset Management posted a total shareholder return of 62% for the past year (including dividends). We regret to report that the share price is down 16% over ninety days. It may simply be that the stock price has gotten ahead of itself, even if fundamental developments may have weighed on it. It is always interesting to follow the evolution of the share price over the long term. But to better understand UTI Asset Management, we need to consider many other factors. Consider the risks, for example. Every business has them, and we’ve spotted 2 warning signs for UTI Asset Management you should know.

But note: UTI Asset Management may not be the best stock to buy. So take a look at this free list of interesting companies with past earnings growth (and new growth forecasts).

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

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

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