On average, over time, stock markets tend to rise higher. This makes investing attractive. But not every stock you buy will perform as well as the overall market. For example, the Southwest Gas Holdings, Inc. (NYSE:SWX), share price is up over the last year, but its gain of 10% trails the market return. However, the longer term returns haven’t been so impressive, with the stock up just 1.0% in the last three years.

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.

Check out our latest analysis for Southwest Gas Holdings

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 way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

During the last year Southwest Gas Holdings grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

Unfortunately Southwest Gas Holdings’ fell 5.1% over twelve months. So using a snapshot of key business metrics doesn’t give us a good picture of why the market is bidding up the stock.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We know that Southwest Gas Holdings has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Southwest Gas Holdings

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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, Southwest Gas Holdings’ TSR for the last 1 year was 14%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

Southwest Gas Holdings shareholders gained a total return of 14% during the year. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 2% per year over five year. This suggests the company might be improving over 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. To that end, you should learn about the 2 warning signs we’ve spotted with Southwest Gas Holdings (including 1 which is a bit concerning) .