Should National Retail Properties (NYSE:NNN) Be Disappointed With Their 15% Profit?

National Retail Properties, Inc. (NYSE:NNN) shareholders have seen the share price descend 15% over the month. On the bright side the share price is up over the last half decade. Unfortunately its return of 15% is below the market return of 38%.

Check out our latest analysis for National Retail Properties

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. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over half a decade, National Retail Properties managed to grow its earnings per share at 4.7% a year. This EPS growth is higher than the 2.8% average annual increase in the share price. So one could conclude that the broader market has become more cautious towards the stock.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on National Retail Properties's earnings, revenue and cash flow.

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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for National Retail Properties the TSR over the last 5 years was 42%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

National Retail Properties shareholders are down 4.5% over twelve months (even including dividends) , which isn't far from the market return of -4.6%. Longer term investors wouldn't be so upset, since they would have made 7.2%, each year, over five years. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. It's always interesting to track share price performance over the longer term. But to understand National Retail Properties better, we need to consider many other factors. For example, we've discovered 1 warning sign for National Retail Properties that you should be aware of before investing here.

Of course National Retail Properties 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 US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.