Wharf Real Estate Investment Company Limited (HKG: 1997) Shareholders should be happy to see the stock price rise 15% in the last quarter. It’s not great that the stock has been down for the past three years. But on the bright side, its return of -12%, is better than the market, which is down 3.5%.
Now let’s look at the fundamentals of the business and see if the long-term shareholder return matches the performance of the underlying business.
However, if you prefer to see where opportunities and risks are in the industry from 1997you can consult our analysis on the real estate sector in Hong Kong.
It is undeniable that markets are sometimes efficient, but prices do not always reflect the underlying performance of companies. By comparing earnings per share (EPS) and share price changes over time, we can get an idea of how investors’ attitudes toward a company change over time.
Wharf Real Estate Investment has made profits in the past. On the other hand, it reported a year-over-year loss, suggesting that it is not reliably profitable. Other metrics can better explain the stock price movement.
With stable revenues over three years, it seems unlikely that the share price will reflect the turnover. We don’t know exactly why the stock price fell, but it seems likely that investors have become less optimistic about the company.
The company’s revenues and profits (over time) are shown in the image below (click to see exact figures).
Wharf Real Estate Investment is well known to investors and many smart analysts have tried to predict future profit levels. You can see what analysts are predicting for Wharf Real Estate Investment in this interactive graph of future profit estimates.
What about dividends?
In addition to measuring share price performance, investors should also consider total shareholder return (TSR). While the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital raising or spin-offs. off updated. It’s fair to say that the TSR gives a more complete picture of stocks that pay a dividend. In the case of Wharf Real Estate Investment, it posted a TSR of -1.0% over the last 3 years. This exceeds the performance of its share price that we mentioned earlier. This is largely the result of its dividend payments!
A different perspective
Pleasantly, Wharf Real Estate Investment’s total shareholder return last year was 4.9%. This includes the value of the dividend. This recent result is much better than the 0.3% drop suffered by shareholders each year (on average) over the last three. The optimist would say this is proof that the stock has bottomed out and better days lie ahead. While it’s worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. Example: we have identified 1 warning sign for Wharf Real Estate Investment you should be aware.
If you’re like me, then you not want to miss this free list of growing companies insiders are buying.
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on HK exchanges.
Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
Valuation is complex, but we help make it simple.
Find out if Wharf Real Estate Investment is potentially overvalued or undervalued by viewing our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.
See the free analysis