Shareholders in One Liberty Properties (NYSE:OLP) are in the red if they invested a year ago
It's understandable if you feel frustrated when a stock you own sees a lower share price. But often it is not a reflection of the fundamental business performance. So while the One Liberty Properties, Inc. (NYSE:OLP) share price is down 11% in the last year, the total return to shareholders (which includes dividends) was -5.9%. That's better than the market which declined 16% over the last year. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 7.3% in three years. It's down 15% in about a quarter. However, one could argue that the price has been influenced by the general market, which is down 12% in the same timeframe.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for One Liberty Properties
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.
During the unfortunate twelve months during which the One Liberty Properties share price fell, it actually saw its earnings per share (EPS) improve by 102%. It's quite possible that growth expectations may have been unreasonable in the past.
The divergence between the EPS and the share price is quite notable, during the year. But we might find some different metrics explain the share price movements better.
One Liberty Properties' dividend seems healthy to us, so we doubt that the yield is a concern for the market. From what we can see, revenue is pretty flat, so that doesn't really explain the share price drop. Of course, it could simply be that it simply fell short of the market consensus expectations.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We know that One Liberty Properties has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling One Liberty Properties stock, you should check out this FREE detailed report on its balance sheet.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of One Liberty Properties, it has a TSR of -5.9% for the last 1 year. 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
While it's never nice to take a loss, One Liberty Properties shareholders can take comfort that , including dividends,their trailing twelve month loss of 5.9% wasn't as bad as the market loss of around 16%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 9% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. It's always interesting to track share price performance over the longer term. But to understand One Liberty Properties better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for One Liberty Properties (of which 2 are concerning!) you should know about.
Of course One Liberty Properties 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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