By buying an index fund, you can roughly match the market return with ease. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, the Tsakos Energy Navigation Limited (NYSE:TEN) share price is up 90% in the last three years, clearly besting the market return of around 22% (not including dividends).

Let’s take a look at the underlying fundamentals over the longer term, and see if they’ve been consistent with shareholders returns.

View our latest analysis for Tsakos Energy Navigation

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Tsakos Energy Navigation 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 how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that Tsakos Energy Navigation has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Tsakos Energy Navigation stock, you should check out this FREE detailed report on its balance sheet.

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Tsakos Energy Navigation the TSR over the last 3 years was 119%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

Tsakos Energy Navigation shareholders are down 25% for the year (even including dividends), but the market itself is up 9.8%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn’t be so upset, since they would have made 8%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It’s always interesting to track share price performance over the longer term. But to understand Tsakos Energy Navigation better, we need to consider many other factors. For instance, we’ve identified 3 warning signs for Tsakos Energy Navigation (1 is significant) that you should be aware of.