Axis Real Estate Investment Trust (KLSE:AXREIT) shareholders have earned a 11% CAGR over the last five years

Stock pickers are generally looking for stocks that will outperform the broader market. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. To wit, the Axis Real Estate Investment Trust share price has climbed 32% in five years, easily topping the market decline of 18% (ignoring dividends). However, more recent returns haven’t been as impressive as that, with the stock returning just 8.9% in the last year , including dividends .

Now it’s worth having a look at the company’s fundamentals too, because that will help us determine if the long-term shareholder return has matched the performance of the underlying business.

See our latest analysis for Axis Real Estate Investment Trust

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

During five years of share price growth, Axis Real Estate Investment Trust achieved compound earnings per share (EPS) growth of 7.3% per year. This EPS growth is higher than the 6% average annual increase in the share price. So one could conclude that the broader market has become more cautious towards the stock.

The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth

We know that Axis Real Estate Investment Trust has improved its bottom line lately, but is it going to grow revenue? You could check this out free report showing analyst revenue forecasts.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Axis Real Estate Investment Trust, it has a TSR of 72% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

Story continues

A Different Perspective

It’s nice to see that Axis Real Estate Investment Trust shareholders have received a total shareholder return of 8.9% over the last year. That’s including the dividend. Having said that, the five-year TSR of 11% a year is even better. It’s always interesting to track share price performance over the longer term. But to understand Axis Real Estate Investment Trust better, we need to consider many other factors. Consider for instance, the ever-present specter of investment risk. We’ve identified 3 warning signs with Axis Real Estate Investment Trust (at least 1 which is concerning), and understanding them should be part of your investment process.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on MY exchanges.

Have feedback on this article? Concerned about the content? get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here