The 7.2% return this week takes Brigham Minerals' (NYSE:MNRL) shareholders one-year gains to 88%
Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. For example, the Brigham Minerals, Inc. (NYSE:MNRL) share price is up 74% in the last 1 year, clearly besting the market return of around 15% (not including dividends). That's a solid performance by our standards! We'll need to follow Brigham Minerals for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
The past week has proven to be lucrative for Brigham Minerals investors, so let's see if fundamentals drove the company's one-year performance.
View our latest analysis for Brigham Minerals
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Brigham Minerals went from making a loss to reporting a profit, in the last year.
While it's good to see positive EPS of US$0.0067 this year, the loss wasn't too bad last year. But judging by the share price, the market is happy with the maiden profit. Inflection points like this can be a great time to take a closer look at a company.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Brigham Minerals has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.
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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Brigham Minerals' TSR for the last 1 year was 88%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Brigham Minerals shareholders should be happy with the total gain of 88% over the last twelve months, including dividends. The more recent returns haven't been as impressive as the longer term returns, coming in at just 8.3%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). 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. For example, we've discovered 3 warning signs for Brigham Minerals (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
Of course Brigham Minerals 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.
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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.
