Franklin BSP Realty Trust (NYSE:FBRT shareholders incur further losses as stock declines 4.6% this week, taking one-year losses to 0.9%

It's easy to match the overall market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the Franklin BSP Realty Trust, Inc. (NYSE:FBRT) share price is down 11% in the last year. That falls noticeably short of the market return of around 19%. Franklin BSP Realty Trust may have better days ahead, of course; we've only looked at a one year period.

Since Franklin BSP Realty Trust has shed US$51m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Franklin BSP Realty Trust

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year Franklin BSP Realty Trust grew its earnings per share, moving from a loss to a profit.

The result looks like a strong improvement to us, so we're surprised the market has sold down the shares. If the improved profitability is a sign of things to come, then right now may prove the perfect time to pop this stock on your watchlist.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Franklin BSP Realty Trust'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). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Franklin BSP Realty Trust the TSR over the last 1 year was -0.9%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

While Franklin BSP Realty Trust shareholders are down 0.9% for the year (even including dividends), the market itself is up 19%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Notably, the loss over the last year isn't as bad as the 2.7% drop in the last three months. So it seems like some holders have been dumping the stock of late - and that's not bullish. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Franklin BSP Realty Trust is showing 3 warning signs in our investment analysis , and 2 of those don't sit too well with us...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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