Oberoi Realty (NSE:OBEROIRLTY) jumps 6.9% this week, though earnings growth is still tracking behind five-year shareholder returns

By
Simply Wall St
Published
January 17, 2022
NSEI:OBEROIRLTY
Source: Shutterstock

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. For example, the Oberoi Realty Limited (NSE:OBEROIRLTY) share price has soared 214% in the last half decade. Most would be very happy with that. In more good news, the share price has risen 16% in thirty days.

The past week has proven to be lucrative for Oberoi Realty investors, so let's see if fundamentals drove the company's five-year performance.

See our latest analysis for Oberoi Realty

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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During five years of share price growth, Oberoi Realty achieved compound earnings per share (EPS) growth of 13% per year. This EPS growth is slower than the share price growth of 26% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.

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

earnings-per-share-growth
NSEI:OBEROIRLTY Earnings Per Share Growth January 17th 2022

We know that Oberoi Realty has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Oberoi Realty will grow revenue in the future.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Oberoi Realty's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Oberoi Realty's TSR of 218% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

It's good to see that Oberoi Realty has rewarded shareholders with a total shareholder return of 74% in the last twelve months. That gain is better than the annual TSR over five years, which is 26%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Is Oberoi Realty cheap compared to other companies? These 3 valuation measures might help you decide.

But note: Oberoi Realty 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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