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- Mortgage REITs
Investors are selling off Franklin BSP Realty Trust (NYSE:FBRT), lack of profits no doubt contribute to shareholders one-year loss
It's normal to be annoyed when stock you own has a declining share price. But often it is not a reflection of the fundamental business performance. The Franklin BSP Realty Trust, Inc. (NYSE:FBRT) is down 12% over a year, but the total shareholder return is -1.9% once you include the dividend. And that total return actually beats the market decline of 13%. We wouldn't rush to judgement on Franklin BSP Realty Trust because we don't have a long term history to look at. Unfortunately the last month hasn't been any better, with the share price down 21%. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
With the stock having lost 5.7% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
See our latest analysis for Franklin BSP Realty Trust
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).
Unhappily, Franklin BSP Realty Trust had to report a 110% decline in EPS over the last year. Readers should not this outcome was influenced by the impact of extraordinary items on EPS. And indeed the company lost money over the last twelve months. This fall in the EPS is significantly worse than the 12% the share price fall. It may have been that the weak EPS was not as bad as some had feared.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into Franklin BSP Realty Trust's key metrics by checking this interactive graph of Franklin BSP Realty Trust'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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Franklin BSP Realty Trust's TSR for the last 1 year was -1.9%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
While they no doubt would have preferred make a profit, at least Franklin BSP Realty Trust shareholders didn't do too badly in the last year. Their loss of 1.9%, including dividends, actually beat the broader market, which lost around 13%. However, the problem arose in the last three months, which saw the share price drop 13%. The recent drop implies that investors are increasingly averse to the stock -- quite possibly due to a deterioration of the business. However, this could create an opportunity if the fundamentals remain strong. It's always interesting to track share price performance over the longer term. But to understand Franklin BSP Realty Trust better, we need to consider many other factors. For example, we've discovered 4 warning signs for Franklin BSP Realty Trust that you should be aware of before investing here.
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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 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.
Franklin BSP Realty Trust
Franklin BSP Realty Trust, Inc., a real estate finance company, originates, acquires, and manages a portfolio of commercial real estate debt investments secured by properties located in the United States.
Second-rate dividend payer with imperfect balance sheet.