Reflecting on Mulkia Gulf Real Estate REIT's (TADAWUL:4336) Share Price Returns Over The Last Year

The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized by Mulkia Gulf Real Estate REIT (TADAWUL:4336) shareholders over the last year, as the share price declined 10%. That contrasts poorly with the market return of 5.5%. On the other hand, the stock is actually up 2.8% over three years. There was little comfort for shareholders in the last week as the price declined a further 1.9%.

See our latest analysis for Mulkia Gulf Real Estate REIT

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).

Unfortunately Mulkia Gulf Real Estate REIT reported an EPS drop of 44% for the last year. This fall in the EPS is significantly worse than the 10% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

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

Dive deeper into Mulkia Gulf Real Estate REIT's key metrics by checking this interactive graph of Mulkia Gulf Real Estate REIT'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. In the case of Mulkia Gulf Real Estate REIT, it has a TSR of -5.9% for the last year. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

The last twelve months weren't great for Mulkia Gulf Real Estate REIT shares, which cost holders 5.9%, including dividends, while the market was up about 5.5%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Investors are up over three years, booking 8% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Mulkia Gulf Real Estate REIT better, we need to consider many other factors. Even so, be aware that Mulkia Gulf Real Estate REIT is showing 5 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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