I
nvestors often aim for their portfolios to outperform the market average. The key is to find enough winning stocks to offset any losers. This can be challenging, especially when considering BTB Real Estate Investment Trust (TSE:BTB.UN), whose share price has dropped by 30% over the past five years. It's important to evaluate if the company's economic performance has been in sync with these disappointing shareholder returns or if there's a discrepancy between the two. Let's delve into this further.

    In his essay "The Superinvestors of Graham-and-Doddsville," Warren Buffett discussed how share prices don't always accurately reflect a business's value. One way to assess how the market's perception of a company has changed is to compare the change in earnings per share (EPS) with the share price movement.

    During the five-year period when BTB Real Estate Investment Trust's share price declined, its earnings per share (EPS) dropped by 11% each year. This decrease in EPS was more severe than the 7% compound annual share price fall. The relatively muted share price reaction might indicate that the market expects the business to turn around.

    Insider purchases over the past year are a positive sign for BTB Real Estate Investment Trust. However, future earnings will be crucial for current shareholders' profitability. Our free interactive report on BTB Real Estate Investment Trust's earnings, revenue, and cash flow provides a comprehensive look at the company's performance.

    When considering investment returns, it's important to consider the difference between total shareholder return (TSR) and share price return. TSR takes into account the value of cash dividends (assuming they were reinvested) and any discounted capital raisings or spin-offs. For companies that pay generous dividends, TSR often exceeds share price return. Interestingly, BTB Real Estate Investment Trust's TSR for the last five years was 7.7%, which surpasses the share price return mentioned earlier. The dividends paid by the company have significantly boosted the total shareholder return.

    BTB Real Estate Investment Trust shareholders gained a total return of 11% over the year, but this return fell short of the market. However, this return was better than the average annual return of 1.5% over five years, suggesting the company may be improving over time. It's always interesting to track share price performance over the long term. However, to understand BTB Real Estate Investment Trust better, we need to consider numerous other factors, including risks. We've identified two warning signs for BTB Real Estate Investment Trust (one of which is significant), which you should be aware of.

    If you like to invest alongside management, you might love this free list of companies. (Hint: most of them are flying under the radar.)

    Please note that the market returns quoted in this article represent the weighted average returns of stocks currently traded on Canadian exchanges.

    If you have any concerns about this article or its content, please get in touch with us directly. Alternatively, you can email our editorial team at 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 using an unbiased methodology. Our articles are not intended to be financial advice. They reflect our personal opinions and should not be considered as a recommendation to buy or sell any stock. We aim to bring you long-term focused analysis driven by fundamental data. Please 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.