Shareholders Of Cyrela Brazil Realty Empreendimentos e Participações (BVMF:CYRE3) Must Be Happy With Their 180% Total Return

It hasn't been the best quarter for Cyrela Brazil Realty S.A. Empreendimentos e Participações (BVMF:CYRE3) shareholders, since the share price has fallen 21% in that time. But that doesn't change the fact that the returns over the last five years have been very strong. It's fair to say most would be happy with 120% the gain in that time. To some, the recent pullback wouldn't be surprising after such a fast rise. Of course, that doesn't necessarily mean it's cheap now.

See our latest analysis for Cyrela Brazil Realty Empreendimentos e Participações

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 five years of share price growth, Cyrela Brazil Realty Empreendimentos e Participações moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

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 Cyrela Brazil Realty Empreendimentos e Participações has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Cyrela Brazil Realty Empreendimentos e Participações' financial health with this free report on its balance sheet.

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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Cyrela Brazil Realty Empreendimentos e Participações' TSR for the last 5 years was 180%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

Cyrela Brazil Realty Empreendimentos e Participações shareholders are up 23% for the year (even including dividends). But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 23% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. 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. Take risks, for example - Cyrela Brazil Realty Empreendimentos e Participações has 3 warning signs (and 1 which is potentially serious) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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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. 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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