Select Water Solutions, Inc. (NYSE:WTTR) shareholders might be concerned after seeing the share price drop 10% in the last month. But that shouldn’t obscure the pleasing returns achieved by shareholders over the last three years. In fact, the company’s share price bested the return of its market index in that time, posting a gain of 96%.

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.

View our latest analysis for Select Water Solutions

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Select Water Solutions became profitable within the last three years. That would generally be considered a positive, so we’d expect the share price to be up.

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

It is of course excellent to see how Select Water Solutions has grown profits over the years, but the future is more important for shareholders. This free interactive report on Select Water Solutions’ balance sheet strength is a great place to start, if you want to investigate the stock further.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Select Water Solutions’ TSR for the last 3 years was 108%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

It’s nice to see that Select Water Solutions shareholders have received a total shareholder return of 81% over the last year. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 8% per year), it would seem that the stock’s performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we’ve discovered 1 warning sign for Select Water Solutions that you should be aware of before investing here.