On average, over time, stock markets tend to rise higher. This makes investing attractive. But not every stock you buy will perform as well as the overall market. Unfortunately for shareholders, while the Brandywine Realty Trust (NYSE:BDN) share price is up 20% in the last year, that falls short of the market return. Unfortunately the longer term returns are not so good, with the stock falling 7.7% in the last three years.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
During the last year Brandywine Realty Trust grew its earnings per share (EPS) by 63%. It’s fair to say that the share price gain of 20% did not keep pace with the EPS growth. Therefore, it seems the market isn’t as excited about Brandywine Realty Trust as it was before. This could be an opportunity.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Brandywine Realty Trust has grown profits over the years, but the future is more important for shareholders. This free interactive report on Brandywine Realty Trust’s balance sheet strength is a great place to start, if you want to investigate the stock further.
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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Brandywine Realty Trust, it has a TSR of 27% for the last year. That exceeds its share price return that we previously mentioned. And there’s no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
Brandywine Realty Trust provided a TSR of 27% over the last twelve months. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 3.6% per year over five year. This suggests the company might be improving over time. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.