Shareholders Of Korean Air Lines (KRX:003490) Must Be Happy With Their 84% Return

On average, over time, stock markets tend to rise higher. This makes investing attractive. But if when you choose to buy stocks, some of them will be below average performers. Over the last year the Korean Air Lines Co., Ltd. (KRX:003490) share price is up 26%, but that's less than the broader market return. Zooming out, the stock is actually down 12% in the last three years.

View our latest analysis for Korean Air Lines

Because Korean Air Lines made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Korean Air Lines saw its revenue shrink by 30%. The lacklustre gain of 26% over twelve months, is not a bad result given the falling revenue. Generally we're pretty unenthusiastic about loss making stocks that are not growing revenue.

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

Korean Air Lines is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Korean Air Lines in this interactive graph of future profit estimates.

What about the Total Shareholder Return (TSR)?

We've already covered Korean Air Lines' share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Korean Air Lines' TSR of 84% for the year exceeded its share price return, because it has paid dividends.

A Different Perspective

It's nice to see that Korean Air Lines shareholders have received a total shareholder return of 84% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 10% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Korean Air Lines better, we need to consider many other factors. Take risks, for example - Korean Air Lines has 1 warning sign we think you should be aware of.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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