Investors Who Bought Invitation Homes (NYSE:INVH) Shares A Year Ago Are Now Up 22%
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These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. For example, the Invitation Homes Inc. (NYSE:INVH) share price is up 22% in the last year, clearly besting than the market return of around 4.1% (not including dividends). That's a solid performance by our standards! We'll need to follow Invitation Homes for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
View our latest analysis for Invitation Homes
We don't think that Invitation Homes's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Over the last twelve months, Invitation Homes's revenue grew by 40%. That's a fairly respectable growth rate. Buyers pushed the share price 22% in response, which isn't unreasonable. If the company can maintain the revenue growth, the share price could go higher still. But it's crucial to check profitability and cash flow before forming a view on the future.
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.
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. If you are thinking of buying or selling Invitation Homes stock, you should check out this free report showing analyst profit forecasts.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Invitation Homes the TSR over the last year was 25%, 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
It's nice to see that Invitation Homes shareholders have gained 25% over the last year, including dividends. A substantial portion of that gain has come in the last three months, with the stock up 15% in that time. This suggests the company is continuing to win over new investors. If you would like to research Invitation Homes in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
Of course Invitation Homes 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.
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 editorial-team@simplywallst.com. 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.
