BrasilAgro - Companhia Brasileira de Propriedades Agrícolas (BVMF:AGRO3) Has Gifted Shareholders With A Fantastic 151% Total Return On Their Investment
If you want to compound wealth in the stock market, you can do so by buying an index fund. But in our experience, buying the right stocks can give your wealth a significant boost. For example, the BrasilAgro - Companhia Brasileira de Propriedades Agrícolas (BVMF:AGRO3) share price is 87% higher than it was five years ago, which is more than the market average. It's fair to say the stock has continued its long term trend in the last year, over which it has risen 20%.
View our latest analysis for BrasilAgro - Companhia Brasileira de Propriedades Agrícolas
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 the last half decade, BrasilAgro - Companhia Brasileira de Propriedades Agrícolas became profitable. That's generally thought to be a genuine positive, so we would expect to see an increasing share price.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that BrasilAgro - Companhia Brasileira de Propriedades Agrícolas has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at BrasilAgro - Companhia Brasileira de Propriedades Agrícolas' financial health with this free report on its balance sheet.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for BrasilAgro - Companhia Brasileira de Propriedades Agrícolas the TSR over the last 5 years was 151%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
It's nice to see that BrasilAgro - Companhia Brasileira de Propriedades Agrícolas shareholders have received a total shareholder return of 27% over the last year. Of course, that includes the dividend. That gain is better than the annual TSR over five years, which is 20%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with BrasilAgro - Companhia Brasileira de Propriedades Agrícolas , and understanding them should be part of your investment process.
Of course BrasilAgro - Companhia Brasileira de Propriedades Agrícolas may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on BR exchanges.
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About BOVESPA:AGRO3
BrasilAgro - Companhia Brasileira de Propriedades Agrícolas
Engages in the acquisition, development, exploration, and sale of agricultural activities in Brazil, Paraguay, and Bolivia.
Undervalued with adequate balance sheet.