The main aim of stock picking is to find the market-beating stocks. But every investor is virtually certain to have both over-performing and under-performing stocks. So we wouldn’t blame long term Tsakos Energy Navigation Limited (NYSE:TNP) shareholders for doubting their decision to hold, with the stock down 57% over a half decade. In contrast, the stock price has popped 9.7% in the last thirty days.
Because Tsakos Energy Navigation is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over five years, Tsakos Energy Navigation grew its revenue at 1.9% per year. That’s not a very high growth rate considering it doesn’t make profits. It’s likely this weak growth has contributed to an annualised return of 15% for the last five years. We’d want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in Tsakos Energy Navigation. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term).
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
This free interactive report on Tsakos Energy Navigation’s balance sheet strength is a great place to start, if you want to investigate the stock further.
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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Tsakos Energy Navigation the TSR over the last 5 years was -47%, 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
Tsakos Energy Navigation provided a TSR of 0.6% over the last twelve months. But that return falls short of the market. But at least that’s still a gain! Over five years the TSR has been a reduction of 12% per year, over five years. So this might be a sign the business has turned its fortunes around. Before forming an opinion on Tsakos Energy Navigation you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.