IGB Real Estate Investment Trust (KLSE:IGBREIT) investors are sitting on a loss of 0.6% if they invested three years ago

In order to justify the effort of selecting individual stocks, it’s worth striving to beat the returns from a market index fund. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that’s been the case for longer term IGB Real Estate Investment Trust (KLSE:IGBREIT) shareholders, since the share price is down 13% in the last three years, falling well short of the market decline of around 4.8%.

So let’s have a look and see if the longer term performance of the company has been in line with the underlying business’ progress.

View our latest analysis for IGB Real Estate Investment Trust

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

IGB Real Estate Investment Trust saw its EPS decline at a compound rate of 2.4% per year, over the last three years. This reduction in EPS is slower than the 5% annual reduction in the share price. So it’s likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth

We know that IGB Real Estate Investment Trust has improved its bottom line lately, but is it going to grow revenue? Check if analysts think IGB Real Estate Investment Trust will grow revenue in the future.

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 is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, IGB Real Estate Investment Trust’s TSR for the last 3 years was -0.6%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

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A Different Perspective

It’s good to see that IGB Real Estate Investment Trust has rewarded shareholders with a total shareholder return of 6.9% in the last twelve months. And that does include the dividend. That’s better than the annualized return of 6% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we’ve spotted with IGB Real Estate Investment Trust .

We will like IGB Real Estate Investment Trust better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider 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.

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