Unless you borrow money to invest, the potential losses are limited. But if you pick the right stock, you can make a lot more than 100%. For example, the Simon Property Group, Inc. (NYSE:SPG) share price had more than doubled in just one year – up 102%. It’s also good to see the share price up 37% over the last quarter. On the other hand, longer term shareholders have had a tougher run, with the stock falling 26% in three years.
Check out our latest analysis for Simon Property Group
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Over the last twelve months, Simon Property Group actually shrank its EPS by 47%.
This means it’s unlikely the market is judging the company based on earnings growth. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.
We haven’t seen Simon Property Group increase dividend payments yet, so the yield probably hasn’t helped drive the share higher. It saw it’s revenue decline by 19% over twelve months. Usually that correlates with a lower share price, but let’s face it, the gyrations of the market are sometimes only as clear as mud.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
It’s good to see that there was some significant insider buying in the last three months. That’s a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. This free report showing analyst forecasts should help you form a view on Simon Property Group
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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Simon Property Group, it has a TSR of 114% for the last 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
We’re pleased to report that Simon Property Group shareholders have received a total shareholder return of 114% over one year. That’s including the dividend. Notably the five-year annualised TSR loss of 6% per year compares very unfavourably with the recent share price performance. 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 Simon Property Group better, we need to consider many other factors. Like risks, for instance. Every company has them, and we’ve spotted 4 warning signs for Simon Property Group (of which 1 is a bit unpleasant!) you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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. 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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