Stock Analysis

INDUS Realty Trust's (NASDAQ:INDT) five-year total shareholder returns outpace the underlying earnings growth

  •  Updated
NasdaqGM:INDT
Source: Shutterstock

INDUS Realty Trust, Inc. (NASDAQ:INDT) shareholders might be concerned after seeing the share price drop 10% in the last week. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 56%, less than the market return of 56%. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 18% drop, in the last year.

Although INDUS Realty Trust has shed US$65m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Before we look at the performance, you might like to know that our analysis indicates that INDT is potentially undervalued!

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 five years of share price growth, INDUS Realty Trust moved from a loss to profitability. That's generally thought to be a genuine positive, so we would expect to see an increasing share price.

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

earnings-per-share-growth
NasdaqGM:INDT Earnings Per Share Growth September 24th 2022

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on INDUS Realty Trust's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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 INDUS Realty Trust, it has a TSR of 68% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

While it's certainly disappointing to see that INDUS Realty Trust shares lost 17% throughout the year, that wasn't as bad as the market loss of 22%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 11% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for INDUS Realty Trust you should be aware of, and 1 of them is potentially serious.

Of course INDUS Realty Trust may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

Valuation is complex, but we're helping make it simple.

Find out whether INDUS Realty Trust is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

About NasdaqGM:INDT

INDUS Realty Trust

INDUS Realty Trust, Inc. is a real estate business principally engaged in developing, acquiring, managing and leasing industrial/warehouse properties.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation0
Future Growth1
Past Performance2
Financial Health3
Dividends3

Read more about these checks in the individual report sections or in our analysis model.

Mediocre balance sheet second-rate dividend payer.