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Published: October 11, 2024
Updated: October 11, 2024

Hindustan Zinc: A 327% Total Return in Five Years, Despite Recent Volatility

Impressive Long-Term Returns for Hindustan Zinc Investors

Hindustan Zinc Limited (NSE: HINDZINC) may have experienced a 23% decline in its share price over the past quarter, but long-term shareholders still have plenty to celebrate. Over the past five years, the company's stock has surged by 141%, reflecting strong returns. Such a pullback after a period of rapid growth is not entirely unexpected, but investors are now evaluating whether the stock still holds value at its current price.

Understanding Hindustan Zinc’s Earnings Performance

One key to understanding Hindustan Zinc’s stock performance is its underlying earnings growth. Over the past five years, the company's compound earnings per share (EPS) have grown by just 0.9% per year. However, the average annual share price increase during the same period was a robust 19%. This disparity suggests that the market holds a more optimistic view of the company, possibly reflecting confidence in its future growth potential.

The Importance of Dividends in Total Shareholder Returns

While share price appreciation is often the headline number, it's crucial to consider the total shareholder return (TSR), which includes dividends. For Hindustan Zinc, the TSR over the past five years was an impressive 327%, significantly outpacing the share price gains. This difference is primarily due to the company’s consistent dividend payments, which have played a key role in rewarding investors.

Recent Positive Sentiment Around Hindustan Zinc

In the past year alone, Hindustan Zinc has delivered a 72% TSR, including dividends, indicating strong investor sentiment despite recent volatility. This return surpasses the five-year average TSR of 34%, hinting that the market’s outlook on the company has grown more positive in the short term. Given the current share price momentum, it may be worth taking a closer look at Hindustan Zinc to evaluate potential opportunities.

Is Hindustan Zinc Still a Buy?

Despite the recent share price dip, Hindustan Zinc has delivered exceptional long-term returns for its shareholders, largely due to its attractive dividends. While EPS growth has been modest, market optimism remains high. Investors should carefully assess the stock’s valuation and any associated risks before making decisions. Those interested in further insights should consider additional analysis, such as financial health and warning signs, before diving in.