Many investors define successful investing as beating the market average over the long term. But the risk of stock picking is that you will likely buy under-performing companies. Unfortunately, that's been the case for longer term BHG Retail REIT (SGX:BMGU) shareholders, since the share price is down 12% in the last three years, falling well short of the market return of around 23%. It's up 2.2% in the last seven days.

See our latest analysis for BHG Retail REIT

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

BHG Retail REIT saw its EPS decline at a compound rate of 17% per year, over the last three years. In comparison the 4.1% compound annual share price decline isn't as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. We note that for BHG Retail REIT the TSR over the last 3 years was 10%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

BHG Retail REIT shareholders may not have made money over the last year, but their total loss of 0.9% ( including dividends) isn't as bad as the market loss of around 0.9%. Shareholders who have held for three years might be relatively sanguine about the recent weakness, given they have made 3.3% per year for three years. Given the three year returns are better than the return over the last year, it might be that the broader market has weighed on the stock recently. Before forming an opinion on BHG Retail REIT you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.