Investors three-year losses continue as Qatar Electricity & Water Company Q.P.S.C (DSM:QEWS) dips a further 3.3% this week, earnings continue to decline

Investors are understandably disappointed when a stock they own declines in value. But it's hard to avoid some disappointing investments when the overall market is down. The Qatar Electricity & Water Company Q.P.S.C. (DSM:QEWS) is down 21% over three years, but the total shareholder return is -3.8% once you include the dividend. And that total return actually beats the market decline of 13%.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

See our latest analysis for Qatar Electricity & Water Company Q.P.S.C

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).

Qatar Electricity & Water Company Q.P.S.C saw its EPS decline at a compound rate of 1.2% per year, over the last three years. The share price decline of 8% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. This increased caution is also evident in the rather low P/E ratio, which is sitting at 11.56.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Qatar Electricity & Water Company Q.P.S.C's key metrics by checking this interactive graph of Qatar Electricity & Water Company Q.P.S.C's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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 Qatar Electricity & Water Company Q.P.S.C the TSR over the last 3 years was -3.8%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Investors in Qatar Electricity & Water Company Q.P.S.C had a tough year, with a total loss of 6.2% (including dividends), against a market gain of about 7.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 8% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Qatar Electricity & Water Company Q.P.S.C better, we need to consider many other factors. For instance, we've identified 1 warning sign for Qatar Electricity & Water Company Q.P.S.C that you should be aware of.

We will like Qatar Electricity & Water Company Q.P.S.C better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 Qatari 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.