Stock Analysis

How Much Have Spirit Realty Capital (NYSE:SRC) Shareholders Earned On Their Investment Over The Last Five Years?

NYSE:SRC
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Spirit Realty Capital, Inc. (NYSE:SRC) shareholders will doubtless be very grateful to see the share price up 30% in the last quarter. But if you look at the last five years the returns have not been good. After all, the share price is down 24% in that time, significantly under-performing the market.

Check out our latest analysis for Spirit Realty Capital

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. 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).

Over five years Spirit Realty Capital's earnings per share dropped significantly, falling to a loss, with the share price also lower. The recent extraordinary items contributed to this situation. At present it's hard to make valid comparisons between EPS and the share price. But we would generally expect a lower price, given the situation.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
NYSE:SRC Earnings Per Share Growth January 26th 2021

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Spirit Realty Capital's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

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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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Spirit Realty Capital, it has a TSR of 22% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Investors in Spirit Realty Capital had a tough year, with a total loss of 17% (including dividends), against a market gain of about 29%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Spirit Realty Capital better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Spirit Realty Capital (of which 1 is significant!) you should know about.

Spirit Realty Capital is not the only stock that insiders are buying. 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.

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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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