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Such Is Life: How SITE Centers (NYSE:SITC) Shareholders Saw Their Shares Drop 63%

Simply Wall St

For many investors, the main point of stock picking is to generate higher returns than the overall market. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term SITE Centers Corp. (NYSE:SITC) shareholders, since the share price is down 63% in the last three years, falling well short of the market return of around 42%.

See our latest analysis for SITE Centers

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.

SITE Centers became profitable within the last five years. We would usually expect to see the share price rise as a result. So it's worth looking at other metrics to try to understand the share price move.

We note that the dividend has declined - a likely contributor to the share price drop. The revenue decline, at an annual rate of 18% over three years, might be considered salt in the wound.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

NYSE:SITC Income Statement, August 22nd 2019
NYSE:SITC Income Statement, August 22nd 2019

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for SITE Centers in this interactive graph of future profit estimates.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of SITE Centers, it has a TSR of -45% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

SITE Centers provided a TSR of 0.7% over the last twelve months. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 9.2% per year, over five years. So this might be a sign the business has turned its fortunes around. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of SITE Centers by clicking this link.

SITE Centers is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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.