RFG Holdings Limited (JSE:RFG) shareholders might be concerned after seeing the share price drop 13% in the last quarter. But that doesn’t change the fact that the returns over the last three years have been pleasing. To wit, the share price did better than an index fund, climbing 67% during that period.

So let’s assess the underlying fundamentals over the last 3 years and see if they’ve moved in lock-step with shareholder returns.

See our latest analysis for RFG Holdings

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During three years of share price growth, RFG Holdings achieved compound earnings per share growth of 38% per year. The average annual share price increase of 19% is actually lower than the EPS growth. Therefore, it seems the market has moderated its expectations for growth, somewhat. We’d venture the lowish P/E ratio of 8.69 also reflects the negative sentiment around the stock.

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

We know that RFG Holdings has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of RFG Holdings, it has a TSR of 92% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

It’s good to see that RFG Holdings has rewarded shareholders with a total shareholder return of 44% in the last twelve months. And that does include the dividend. That gain is better than the annual TSR over five years, which is 15%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It’s always interesting to track share price performance over the longer term. But to understand RFG Holdings better, we need to consider many other factors. Even so, be aware that RFG Holdings is showing 1 warning sign in our investment analysis , you should know about…