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As an investor its worth striving to ensure your overall portfolio beats the market average. But if you try your hand at stock picking, your risk returning less than the market. We regret to report that long term BillerudKorsnäs AB (publ) (STO:BILL) shareholders have had that experience, with the share price dropping 24% in three years, versus a market return of about 29%. The good news is that the stock is up 2.9% in the last week.
See our latest analysis for BillerudKorsnäs
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
BillerudKorsnäs saw its EPS decline at a compound rate of 9.8% per year, over the last three years. This fall in EPS isn't far from the rate of share price decline, which was 8.7% per year. 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.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It might be well worthwhile taking a look at our free report on BillerudKorsnäs'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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, BillerudKorsnäs's TSR for the last 3 years was -18%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
A Different Perspective
It's nice to see that BillerudKorsnäs shareholders have received a total shareholder return of 12% over the last year. And that does include the dividend. That gain is better than the annual TSR over five years, which is 4.1%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. If you would like to research BillerudKorsnäs in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.