Despite constant attempts by analysts and the media to complicate the basics of investing, there are only three ways a stock can create value for shareholders:

  1. Dividends.
  2. Earnings growth.
  3. Changes in valuation multiples.

In this series, we drill down on one company's returns to see how each of those three has played a role over the past decade. Step on up, Campbell Soup (NYSE: CPB).

Campbell shares returned 45% over the past decade. How'd they get there?

Dividends did most of the heavy lifting. Without dividends, shares returned just 11.4% over the last 10 years.

Earnings growth was respectable. Campbell's normalized earnings per share grew at an average rate of 4.8% a year from 2001 until today. That's on par with the market average, and about what you should expect from an established large-cap company: earnings growth that trucks along at a notch above the rate of inflation.

And have a look at the company's valuation multiple:

Cpbhistory

Source: S&P Capital IQ.

Like so many other companies, Campbell's shares were overvalued 10 years ago. Compressing valuations since then have prevented part of the company's earnings growth from turning into shareholder returns. This has been especially prevalent in the name-brand food industry: Other food manufacturers, like Kraft (NYSE: KFT) and General Mills (NYSE: GIS), saw valuations fall as competition from generic store brands really took root, hurting growth prospects. The good news is that, at less than 15 times earnings, Campbell's shares look reasonably valued today. Going forward, far more of the company's earnings growth should materialize into shareholder returns.

Why is this stuff worth paying attention to? It's important to know not only how much a stock has returned, but where those returns came from. Sometimes earnings grow, but the market isn't willing to pay as much for those earnings. Sometimes earnings fall, but the market bids shares higher anyway. Sometimes both earnings and earnings multiples stay flat, but a company generates returns through dividends. Sometimes everything works together, and returns surge. Sometimes nothing works and they crash. All tell a different story about the state of a company. Not knowing why something happened can be just as dangerous as not knowing that something happened at all.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.