Yahoo Finance If You Had Bought Beacon Lighting Group (ASX:BLX) Stock Three Years Ago, You'd Be Sitting On A 16% Loss, Today
Beacon Lighting Group Limited (ASX:BLX) shareholders should be happy to see the share price up 27% in the last quarter. But that doesn't change the fact that the returns over the last three years have been less than pleasing. After all, the share price is down 16% in the last three years, significantly under-performing the market.
Check out our latest analysis for Beacon Lighting Group
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During the three years that the share price fell, Beacon Lighting Group's earnings per share (EPS) dropped by 4.7% each year. This change in EPS is reasonably close to the 5.6% average annual decrease in the share price. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. In this case, it seems that the EPS is guiding the share price.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into Beacon Lighting Group's key metrics by checking this interactive graph of Beacon Lighting Group's earnings, revenue and cash flow.
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. In the case of Beacon Lighting Group, it has a TSR of -7.0% 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
Beacon Lighting Group provided a TSR of 4.9% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 4.8% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. Before forming an opinion on Beacon Lighting Group you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
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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.