In today’s market, many investors rely on Earnings Per Share (EPS) to gauge a company’s performance.
But as companies raise capital and expand their share base, Total Shareholder Return (TSR) is becoming just as important because it tells the real story of what shareholders are getting back.
EPS is a classic.
It tells you how much profit is attributable to each share. It’s easy to track, it’s in every company’s results, and it’s the bedrock of stock valuation tools like the price-to-earnings ratio. So, naturally, when a company posts strong EPS growth, it feels like a win.
But here’s the catch: EPS doesn’t always reflect the full story of shareholder value. It doesn’t account for share price performance or dividends, and it can be skewed by things like capital raises that dilute the share count.
So, what exactly is EPS?
EPS = Profit after Tax (attributable to shareholders) ÷ Weighted Average Shares Outstanding
Simple. But imagine this: a company grows its total profits significantly, yet EPS falls. Why? Because it issued more shares.
Investors who only look at EPS might feel confused that the business made more money, but they are getting less per share.
This is where Total Shareholder Return (TSR) comes in as a more investor-focused metric
What is TSR?
TSR measures the actual return a shareholder gets by combining:
- Share price appreciation (or depreciation), and
- Dividends received during the period
It answers the real question on investors’ minds: How much did I actually earn from holding this stock over time?
You can calculate it like this:
TSR (%) = [(Ending Share Price – Beginning Share Price + Dividends Paid) ÷ Beginning Share Price] × 100
But when a company increases its number of shares, and we want to capture total value created, not just per share, we can also look at:
TSR (Market Cap Based) = (Change in Market Cap + Dividends Paid) ÷ Beginning Market Cap
With that in mind, let’s look at some real examples from the Nigerian market.
When Zenith Bank announced it had grown its earnings per share (EPS) by over 52% in 2024, it was a big headline. Investors and analysts took notice.
But here’s the thing: while EPS tells us what the company earned; it does not always tell us what the shareholder earned.
That is where Total Shareholder Return, or TSR, comes in, a number that too often gets overlooked.
It takes the full picture into account, not just earnings, but also what happened to the share price and how much dividend was paid. It answers the question every investor is actually asking: “How much did I gain?”
In Zenith’s case, the story got more interesting when we dug deeper. Despite issuing nearly 10 billion additional shares in 2024, which usually dilutes value, investors still walked away with a 70% return when you combine share price appreciation and dividends. That is even more than the EPS growth.
Let’s look at another example.
Dangote Cement had a much more modest EPS growth around 12% in 2024. Nothing spectacular.
But shareholders had a fantastic year, earning a TSR of 59%, thanks largely to a massive N506 billion dividend payout and a strong rally in the stock price.
Dangote Cement’s total market capitalization in 2024 increased by over N2.68 trillion. The number of shares stayed the same, so no dilution here. Yet again, TSR tells the fuller, more useful story.
Then there is BUA Cement. Earnings per share grew by 6% in 2024, and the company paid out almost all of its profits, over 93%, as dividends.
But the share price fell, dragging market capitalization down by over N135 billion, no share dilution. The final result for investors? A negative return of –2%. The company made more money. You earned less.
That is the disconnect.
This matters even more now, as many companies on the Nigerian Exchange (NGX) are raising capital and issuing more shares to meet regulatory requirements or fund expansion.
When shares increase, EPS can drop even if total profit is growing. This happened to Zenith in Q1 2025.
Profit after tax rose by more than 20%, but EPS fell because there were more shares. Number of shares at the end of Q1 2025 stood at 41,070 billion compared to the 31.396 billion in Q1 2024.
Yet, TSR remained healthy because the share price rose and dividends were still on the table.
In short, EPS tells a part of the story an important part, no doubt. But it does not capture your actual experience as an investor.
It does not reflect the movement in share price or the joy of dividend alerts. That is TSR’s job.
So, what should investors care about more? Both metrics matter. EPS gives insight into business performance. But TSR is what you feel in your wallet. It is the difference between a company doing well, and you doing well.
As capital raises, share buybacks, and dividend strategies become more common in Nigeria’s public markets, we need to look beyond just the profit per share.
Because at the end of the day, what you really care about is not just what the company made,
It is what you got.
For shareholders and analysts watching the Nigerian Market; from Zenith Bank to BUA Cement to Dangote Cement, the lesson is simple:
When you are measuring performance, do not stop at earnings per share. Always ask: “How did this stock actually perform for me?” Because in investing, what really matters isn’t just how the company performed, it’s how you did.
