Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. For example, the Züblin Immobilien Holding AG (VTX:ZUBN) share price is up 35% in the last 1 year, clearly besting the market decline of around 0.9% (not including dividends). So that should have shareholders smiling. It is also impressive that the stock is up 32% over three years, adding to the sense that it is a real winner.

So let’s assess the underlying fundamentals over the last 1 year and see if they’ve moved in lock-step with shareholder returns.

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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 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).

Züblin Immobilien Holding was able to grow EPS by 34% in the last twelve months. This EPS growth is remarkably close to the 35% increase in the share price. So this implies that investor expectations of the company have remained pretty steady. It makes intuitive sense that the share price and EPS would grow at similar rates.

The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Züblin Immobilien Holding’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Züblin Immobilien Holding, it has a TSR of 40% for the last 1 year. That exceeds its share price return that we previously mentioned. And there’s no prize for guessing that the dividend payments largely explain the divergence!

We’re pleased to report that Züblin Immobilien Holding shareholders have received a total shareholder return of 40% over one year. Of course, that includes the dividend. That’s better than the annualised return of 8% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we’ve spotted 3 warning signs for Züblin Immobilien Holding (of which 1 doesn’t sit too well with us!) you should know about.