Emaar Properties PJSC's (DFM:EMAAR) Stock Price Has Reduced 39% In The Past Three Years

Emaar Properties PJSC (DFM:EMAAR) shareholders will doubtless be very grateful to see the share price up 53% in the last quarter. But that doesn't help the fact that the three year return is less impressive. Truth be told the share price declined 39% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

See our latest analysis for Emaar Properties PJSC

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During the three years that the share price fell, Emaar Properties PJSC's earnings per share (EPS) dropped by 11% each year. This reduction in EPS is slower than the 15% annual reduction in the share price. So it seems the market was too confident about the business, in the past. This increased caution is also evident in the rather low P/E ratio, which is sitting at 6.73.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into Emaar Properties PJSC's key metrics by checking this interactive graph of Emaar Properties PJSC's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Emaar Properties PJSC's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that Emaar Properties PJSC's TSR, which was a 36% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

While the broader market gained around 17% in the last year, Emaar Properties PJSC shareholders lost 0.8%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, longer term shareholders are suffering worse, given the loss of 3% doled out over the last five years. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. 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 2 warning signs with Emaar Properties PJSC , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

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