Yahoo Finance Did You Participate In Any Of Investore Property's (NZSE:IPL) Respectable 89% Return?
By buying an index fund, investors can approximate the average market return. But if you pick the right individual stocks, you could make more than that. For example, the Investore Property Limited (NZSE:IPL) share price is up 62% in the last three years, clearly besting the market return of around 27% (not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 24% , including dividends .
See our latest analysis for Investore Property
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Over the last three years, Investore Property failed to grow earnings per share, which fell 12% (annualized).
This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.
It could be that the revenue growth of 9.2% per year is viewed as evidence that Investore Property is growing. If the company is being managed for the long term good, today's shareholders might be right to hold on.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Investore Property's balance sheet strength is a great place to start, if you want to investigate the stock further.
What About Dividends?
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, Investore Property's TSR for the last 3 years was 89%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
It's nice to see that Investore Property shareholders have gained 24% (in total) over the last year. And yes, that does include the dividend. That's better than the annualized TSR of 24% over the last three years. Given the track record of solid returns over varying time frames, it might be worth putting Investore Property on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Investore Property better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Investore Property (including 1 which is can't be ignored) .
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NZ exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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