The last three months have been tough on Impax Asset Management Group Plc (LON:IPX) shareholders, who have seen the share price decline a rather worrying 37%. But that doesn't change the fact that the returns over the last five years have been very strong. Indeed, the share price is up an impressive 118% in that time. So while it's never fun to see a share price fall, it's important to look at a longer time horizon. Only time will tell if there is still too much optimism currently reflected in the share price.

Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

Check out our latest analysis for Impax Asset Management Group

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over half a decade, Impax Asset Management Group managed to grow its earnings per share at 37% a year. This EPS growth is higher than the 17% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.

You can see below how EPS has changed over time (discover the exact values by clicking on the image). earnings-per-share-growth

We know that Impax Asset Management Group has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Impax Asset Management Group's balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. In the case of Impax Asset Management Group, it has a TSR of 142% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!



A Different Perspective

Investors in Impax Asset Management Group had a tough year, with a total loss of 19% (including dividends), against a market gain of about 0.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 19% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Impax Asset Management Group better, we need to consider many other factors. Case in point: We've spotted  2 warning signs for Impax Asset Management Group you should be aware of, and 1 of them is a bit unpleasant.

But note: Impax Asset Management Group may not be the best stock to buy. So take a peek at this freelist of interesting companies with past earnings growth (and further growth forecast).

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.