ShenZhen Properties & Resources Development (Group) (SZSE:000011) shareholders have lost 13% over 3 years, earnings decline likely the culprit

It can certainly be frustrating when a stock does not perform as hoped. But when the market is down, you're bound to have some losers. The ShenZhen Properties & Resources Development (Group) Ltd. (SZSE:000011) is down 24% over three years, but the total shareholder return is -13% once you include the dividend. And that total return actually beats the market decline of 15%. On top of that, the share price is down 7.5% in the last week.

After losing 7.5% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for ShenZhen Properties & Resources Development (Group)

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

ShenZhen Properties & Resources Development (Group) saw its EPS decline at a compound rate of 44% per year, over the last three years. In comparison the 9% compound annual share price decline isn't as bad as the EPS drop-off. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.

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

This free interactive report on ShenZhen Properties & Resources Development (Group)'s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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, ShenZhen Properties & Resources Development (Group)'s TSR for the last 3 years was -13%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

ShenZhen Properties & Resources Development (Group) shareholders gained a total return of 6.6% during the year. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 3% per year over five year. This suggests the company might be improving over time. 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. To that end, you should learn about the 3 warning signs we've spotted with ShenZhen Properties & Resources Development (Group) (including 2 which shouldn't be ignored) .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.