BF Utilities' (NSE:BFUTILITIE) Shareholders Are Down 44% On Their Shares

While it may not be enough for some shareholders, we think it is good to see the BF Utilities Limited (NSE:BFUTILITIE) share price up 23% in a single quarter. But if you look at the last five years the returns have not been good. After all, the share price is down 44% in that time, significantly under-performing the market.

See our latest analysis for BF Utilities

While BF Utilities made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last five years BF Utilities saw its revenue shrink by 1.7% per year. While far from catastrophic that is not good. The share price decline at a rate of 8% per year is disappointing. Unfortunately, though, it makes sense given the lack of either profits or revenue growth. Without profits, its hard to see how shareholders win if the revenue keeps falling.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on BF Utilities' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market gained around 22% in the last year, BF Utilities shareholders lost 1.2%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, longer term shareholders are suffering worse, given the loss of 8% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. 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 risks, for instance. Every company has them, and we've spotted 3 warning signs for BF Utilities you should know about.

But note: BF Utilities 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 IN 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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