Braemar Shipping Services' (LON:BMS) 77% return outpaced the company's earnings growth over the same one-year period
While Braemar Shipping Services Plc (LON:BMS) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 15% in the last quarter. But that doesn't change the fact that the returns over the last year have been pleasing. To wit, it had solidly beat the market, up 74%.
The past week has proven to be lucrative for Braemar Shipping Services investors, so let's see if fundamentals drove the company's one-year performance.
View our latest analysis for Braemar Shipping Services
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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Braemar Shipping Services was able to grow EPS by 19% in the last twelve months. This EPS growth is significantly lower than the 74% increase in the share price. This indicates that the market is now more optimistic about the stock.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how Braemar Shipping Services has grown profits over the years, but the future is more important for shareholders. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Braemar Shipping Services the TSR over the last 1 year was 77%, 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
We're pleased to report that Braemar Shipping Services shareholders have received a total shareholder return of 77% over one year. That's including the dividend. There's no doubt those recent returns are much better than the TSR loss of 0.3% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Braemar Shipping Services better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Braemar Shipping Services you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.
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.
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