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By buying an index fund, you can roughly match the market return with ease. But if you pick the right individual stocks, you could make more than that. For example, the Garda Diversified Property Fund (ASX:GDF) share price is up 35% in the last three years, clearly besting than the market return of around 20% (not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 30%, including dividends.
Check out our latest analysis for Garda Diversified Property Fund
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Garda Diversified Property Fund became profitable within the last three years. So we would expect a higher share price over the period.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Garda Diversified Property Fund has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Garda Diversified Property Fund will grow revenue in the future.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Garda Diversified Property Fund the TSR over the last 3 years was 73%, 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
It's nice to see that Garda Diversified Property Fund shareholders have gained 30% (in total) over the last year. That's including the dividend. That's better than the annualized TSR of 20% over the last three years. The improving returns to shareholders suggests the stock is becoming more popular with time. If you would like to research Garda Diversified Property Fund in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.