Would Shareholders Who Purchased British American Tobacco (Malaysia) Berhad's (KLSE:BAT) Stock Five Years Be Happy With The Share price Today?

British American Tobacco (Malaysia) Berhad (KLSE:BAT) shareholders should be happy to see the share price up 12% in the last quarter. But don't envy holders -- looking back over 5 years the returns have been really bad. Indeed, the share price is down 77% in the period. So we're not so sure if the recent bounce should be celebrated. Of course, this could be the start of a turnaround.

View our latest analysis for British American Tobacco (Malaysia) Berhad

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Looking back five years, both British American Tobacco (Malaysia) Berhad's share price and EPS declined; the latter at a rate of 23% per year. Notably, the share price has fallen at 26% per year, fairly close to the change in the EPS. This suggests that market participants have not changed their view of the company all that much. So it's fair to say the share price has been responding to changes in EPS.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into British American Tobacco (Malaysia) Berhad's key metrics by checking this interactive graph of British American Tobacco (Malaysia) Berhad'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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, British American Tobacco (Malaysia) Berhad's TSR for the last 5 years was -70%, 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

It's good to see that British American Tobacco (Malaysia) Berhad has rewarded shareholders with a total shareholder return of 14% in the last twelve months. And that does include the dividend. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand British American Tobacco (Malaysia) Berhad better, we need to consider many other factors. For example, we've discovered 3 warning signs for British American Tobacco (Malaysia) Berhad (1 is potentially serious!) that you should be aware of before investing here.

We will like British American Tobacco (Malaysia) Berhad better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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