Did You Participate In Any Of Frasers Logistics & Commercial Trust's (SGX:BUOU) Respectable 59% Return?

One simple way to benefit from the stock market is to buy an index fund. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. Just take a look at Frasers Logistics & Commercial Trust (SGX:BUOU), which is up 31%, over three years, soundly beating the market decline of 22% (not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 18% , including dividends .

See our latest analysis for Frasers Logistics & Commercial Trust

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Over the last three years, Frasers Logistics & Commercial Trust failed to grow earnings per share, which fell 1.2% (annualized).

Based on these numbers, we think that the decline in earnings per share may not be a good representation of how the business has changed over the years. Therefore, it makes sense to look into other metrics.

We doubt the dividend payments explain the share price rise, since we don't see any improvement in that regard. But it's far more plausible that the revenue growth of 19% per year is viewed as evidence that Frasers Logistics & Commercial Trust is growing. In that case, the revenue growth might be more important to shareholders, for now, thus justifying a higer share price.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We know that Frasers Logistics & Commercial Trust has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Frasers Logistics & Commercial Trust in this interactive graph of future profit estimates.

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. We note that for Frasers Logistics & Commercial Trust the TSR over the last 3 years was 59%, 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

We're pleased to report that Frasers Logistics & Commercial Trust rewarded shareholders with a total shareholder return of 18% over the last year. And yes, that does include the dividend. That's better than the annualized TSR of 17% over the last three years. The improving returns to shareholders suggests the stock is becoming more popular with time. It's always interesting to track share price performance over the longer term. But to understand Frasers Logistics & Commercial Trust better, we need to consider many other factors. Take risks, for example - Frasers Logistics & Commercial Trust has 4 warning signs (and 2 which shouldn't be ignored) we think you should know about.

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 SG 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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