In order to justify the effort of selecting individual stocks, it’s worth striving to beat the returns from a market index fund. But the main game is to find enough winners to more than offset the losers So we wouldn’t blame long term Heineken Malaysia Berhad (KLSE:HEIM) shareholders for doubting their decision to hold, with the stock down 10% over a half decade.

Now let’s have a look at the company’s fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.

Check out our latest analysis for Heineken Malaysia Berhad

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 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.

While the share price declined over five years, Heineken Malaysia Berhad actually managed to increase EPS by an average of 5.7% per year. So it doesn’t seem like EPS is a great guide to understanding how the market is valuing the stock. Or possibly, the market was previously very optimistic, so the stock has disappointed, despite improving EPS.

It’s strange to see such muted share price performance despite sustained growth. Perhaps a clue lies in other metrics.

The steady dividend doesn’t really explain why the share price is down. It’s not immediately clear to us why the stock price is down but further research might provide some answers.

The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Heineken Malaysia Berhad the TSR over the last 5 years was 11%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

Heineken Malaysia Berhad provided a TSR of 9.5% over the last twelve months. But that was short of the market average. On the bright side, that’s still a gain, and it’s actually better than the average return of 2% over half a decade This suggests the company might be improving over time. It’s always interesting to track share price performance over the longer term. But to understand Heineken Malaysia Berhad better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with Heineken Malaysia Berhad , and understanding them should be part of your investment process.