BrasilAgro - Companhia Brasileira de Propriedades Agrícolas (BVMF:AGRO3) Has Gifted Shareholders With A Fantastic 157% Total Return On Their Investment

BrasilAgro - Companhia Brasileira de Propriedades Agrícolas (BVMF:AGRO3) shareholders have seen the share price descend 14% over the month. But that doesn't change the fact that shareholders have received really good returns over the last five years. It's fair to say most would be happy with 108% the gain in that time. Generally speaking the long term returns will give you a better idea of business quality than short periods can. Ultimately business performance will determine whether the stock price continues the positive long term trend.

See our latest analysis for BrasilAgro - Companhia Brasileira de Propriedades Agrícolas

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

BrasilAgro - Companhia Brasileira de Propriedades Agrícolas' earnings per share are down 14% per year, despite strong share price performance over five years.

Essentially, it doesn't seem likely that investors are focused on EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

In contrast revenue growth of 25% per year is probably viewed as evidence that BrasilAgro - Companhia Brasileira de Propriedades Agrícolas is growing, a real positive. In that case, the company may be sacrificing current earnings per share to drive growth.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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?

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for BrasilAgro - Companhia Brasileira de Propriedades Agrícolas the TSR over the last 5 years was 157%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It's good to see that BrasilAgro - Companhia Brasileira de Propriedades Agrícolas has rewarded shareholders with a total shareholder return of 17% in the last twelve months. Of course, that includes the dividend. However, the TSR over five years, coming in at 21% per year, is even more impressive. 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 3 warning signs with BrasilAgro - Companhia Brasileira de Propriedades Agrícolas , and understanding them should be part of your investment process.

We will like BrasilAgro - Companhia Brasileira de Propriedades Agrícolas better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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