Those who invested in Las Vegas Sands (NYSE:LVS) three years ago are up 34%

By purchasing an index fund, you can easily approximate the market return. However, if you buy good companies at attractive prices, your portfolio's return could exceed the average market return. For example, Las Vegas Sands Corp. (NYSE:LVS) shareholders have seen the share price rise 31% in three years, significantly exceeding the market return (16%, excluding dividends). However, recent returns haven't been as impressive: the stock returned just 13% over the last year, including dividends.

Let's take a longer-term look at the underlying fundamentals and see whether they are consistent with shareholder returns.

Check out our latest analysis for Las Vegas Sands

In his essay The super investors of Graham and Doddsville Warren Buffett described how stock prices do not always rationally reflect the value of a company. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During three years of rising stock prices, Las Vegas Sands managed to move from a loss to profitability. Therefore, we would expect the share price to rise over the period.

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

We know Las Vegas Sands has improved its bottom line over the last three years, but what does the future hold? Take a closer look at Las Vegas Sands' financial health here free Report on its balance sheet.

What about dividends?

It is important to consider the total shareholder return as well as the share price return for a particular 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In fact, Las Vegas Sands's TSR for the last three years was 34%, which is higher than the share price return mentioned earlier. And it's not worth guessing that dividend payments largely explain the divergence!

A different perspective

Las Vegas Sands achieved a TSR of 13% over the last twelve months. But that was below the market average. On the bright side, that's still a gain, and certainly better than the roughly 2% annual loss suffered over half a decade. It could well be that business is stabilizing. While it's well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. However, note that Las Vegas Sands is visible 2 warning signs in our investment analysis this is what you should know…

But note: Las Vegas Sands may not be the best stock to buy. So take a look free List of interesting companies with past earnings growth (and further growth forecast).

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

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term focused analysis based on fundamental data. Note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no positions in any stocks mentioned.