Stock Analysis

Fonciere Atland's (EPA:FATL) five-year total shareholder returns outpace the underlying earnings growth

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ENXTPA:ATLD
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Fonciere Atland (EPA:FATL) shareholders might be concerned after seeing the share price drop 11% in the last week. But in stark contrast, the returns over the last half decade have impressed. Indeed, the share price is up an impressive 115% in that time. So while it's never fun to see a share price fall, it's important to look at a longer time horizon. Ultimately business performance will determine whether the stock price continues the positive long term trend.

Although Fonciere Atland has shed €21m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

View our latest analysis for Fonciere Atland

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.

During five years of share price growth, Fonciere Atland achieved compound earnings per share (EPS) growth of 36% per year. This EPS growth is higher than the 17% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company. The reasonably low P/E ratio of 8.22 also suggests market apprehension.

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

earnings-per-share-growth
ENXTPA:FATL Earnings Per Share Growth February 28th 2022

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

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Fonciere Atland's TSR for the last 5 years was 172%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Fonciere Atland shareholders have received a total shareholder return of 25% over the last year. That's including the dividend. That's better than the annualised return of 22% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Fonciere Atland better, we need to consider many other factors. Even so, be aware that Fonciere Atland is showing 4 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

But note: Fonciere Atland may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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