Shareholders in Barwa Real Estate Company Q.P.S.C (DSM:BRES) are in the red if they invested three years ago

As an investor its worth striving to ensure your overall portfolio beats the market average. But if you try your hand at stock picking, your risk returning less than the market. Unfortunately, that's been the case for longer term Barwa Real Estate Company Q.P.S.C. (DSM:BRES) shareholders, since the share price is down 18% in the last three years, falling well short of the market return of around 28%. Contrary to the longer term story, the last month has been good for stockholders, with a share price gain of 9.6%. However, this may be a matter of broader market optimism, since stocks are up 7.4% in the same time.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

View our latest analysis for Barwa Real Estate Company Q.P.S.C

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Barwa Real Estate Company Q.P.S.C saw its EPS decline at a compound rate of 7.8% per year, over the last three years. This fall in the EPS is worse than the 6% compound annual share price fall. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.

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

Dive deeper into Barwa Real Estate Company Q.P.S.C's key metrics by checking this interactive graph of Barwa Real Estate Company Q.P.S.C's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. We note that for Barwa Real Estate Company Q.P.S.C the TSR over the last 3 years was -3.0%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Barwa Real Estate Company Q.P.S.C shareholders gained a total return of 5.7% during the year. Unfortunately this falls short of the market return. The silver lining is that the gain was actually better than the average annual return of 5% per year over five year. This suggests the company might be improving over time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Barwa Real Estate Company Q.P.S.C has 5 warning signs (and 2 which are a bit unpleasant) we think you should know about.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.