realestate

Schroder REIT's Earnings Growth Lags Behind Shareholder Returns Over Five Years

If you buy and hold a stock for many years, your goal is likely to achieve long-term growth and compound returns.

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f you hold a stock for many years, you'd naturally expect to see it rise more than the market average. Unfortunately, Schroder Real Estate Investment Trust Limited (LON:SREI) has only seen its share price increase 26% in the last five years, which is less than the market return. However, when including dividends, the total return is actually higher than the market average. Over the past year alone, the stock has risen by 19%. The recent week's performance has been particularly lucrative for investors, so let's examine if fundamentals drove the company's five-year performance.

    One way to gauge investor sentiment is to compare earnings per share (EPS) with the share price. During the last half decade, Schroder Real Estate Investment Trust became profitable, which is generally seen as a positive sign. You can see how EPS has changed over time in the image below.

    The total shareholder return (TSR), which accounts for dividends and other factors, gives a more complete picture of a stock's performance. In this case, Schroder Real Estate Investment Trust's TSR is 72% over five years, exceeding its share price return. The company has rewarded shareholders with a TSR of 28% in the last twelve months, including dividends.

    This positive sentiment may hint at real business momentum, suggesting that now could be a great time to delve deeper into the company. However, it's essential to consider other factors that can impact the share price, such as market conditions and potential warning signs.

Schroder REIT's earnings growth lags behind shareholder returns in UK market.