INDUS Realty Trust, Inc. (NASDAQ:INDT) shareholders have seen the share price descend 13% over the month. But that doesn't change the fact that shareholders have received really good returns over the last five years. In fact, the share price is 162% higher today. So while it's never fun to see a share price fall, it's important to look at a longer time horizon. Of course, that doesn't necessarily mean it's cheap now.
Check out our latest analysis for INDUS Realty Trust
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
During five years of share price growth, INDUS Realty Trust actually saw its EPS drop 2.0% per year.
So it's hard to argue that the earnings per share are the best metric to judge the company, as it may not be optimized for profits at this point. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.
We doubt the modest 0.8% dividend yield is attracting many buyers to the stock. On the other hand, INDUS Realty Trust's revenue is growing nicely, at a compound rate of 7.3% over the last five years. In that case, the company may be sacrificing current earnings per share to drive growth.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. 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). 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for INDUS Realty Trust the TSR over the last 5 years was 175%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!