A Look At Wharf Real Estate Investment’s (HKG:1997) Share Price Returns

While it may not be enough for some shareholders, we think it is good to see that Wharf Real Estate Investment Company Limited (HKG: 1997) Share price up 27% in one quarter. That doesn’t help that the three-year return is less impressive. To be honest, the stock’s price has fallen 25% in three years and that return, dear reader, is below what you could have made by investing passively with an index fund.

Check out our latest analysis for Wharf Real Estate Investment

To paraphrase Benjamin Graham, in the short term the market is a voting machine, but in the long term it is a Libra. One way to study how market sentiment has changed over time is to examine the interaction between a company’s stock price and earnings per share (EPS).

In the three years that its stock price declined, Wharf Real Estate Investment’s earnings per share (EPS) fell significantly and was lost. Extraordinary items have contributed to this situation. Because of the loss, it is not easy to use EPS as a reliable guide to business. However, it is safe to say that we would generally expect a lower share price!

The image below shows how EPS has been tracked over time (click the image to see more details).

SEHK: Earnings per share growth 1997 on December 25, 2020

These free An interactive report on Wharf Real Estate Investment’s earnings, earnings, and cash flow is a great place to start if you want to explore the stock further.

What about dividends?

When looking at investment returns, it is important to consider the difference between the total shareholder return (TSR) and the share price return. The TSR is a yield calculation that takes into account the value of cash dividends (assuming any dividend received has been reinvested) and the calculated value of discounted capital increases and carve-outs. It’s fair to say that the TSR paints a more complete picture for stocks that pay a dividend. In the case of Wharf Real Estate Investment, it has had a TSR of -14% over the past 3 years. This exceeds the previously mentioned share price return. And there’s no price to be paid to guessing that the dividend payments largely explain the divergence!

Another perspective

The past twelve months have not been particularly good for Wharf Real Estate investment stocks, which cost holders 10% including dividends while the market rose 6.3%. Note, however, that even the best stocks can sometimes underperform the market over a twelve month period. The three-year loss of 4% a year isn’t as bad as it has been over the past twelve months, which suggests the company hasn’t been able to convince the market that it has resolved its problems. Although Baron Rothschild famously said, “buy when there is blood on the streets even when the blood is your own,” he also focuses on high quality stocks with solid prospects. It is always interesting to follow the share price development over the long term. However, to better understand Wharf Real Estate Investment we need to consider many other factors. Note, however, that Wharf Real Estate Investment is showing 1 warning sign in our investment analysis , you should know about …

But note: Wharf Real Estate Investment may not be the best stock to buy. So take a look at it free List of interesting companies with a history of earnings growth (and further growth forecast).

Please note that the market returns reported in this article reflect the market weighted average returns on stocks currently traded on HK exchanges.

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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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