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It might be of some concern to shareholders to see the Big River Industries Limited (ASX:BRI) share price down 18% in the last month. But don't let that distract from the very nice return generated over three years. After all, the share price is up a market-beating 79% in that time.
So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.
Check out our latest analysis for Big River Industries
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Big River Industries became profitable within the last three years. So we would expect a higher share price over the period.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Big River Industries has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Big River Industries' financial health with this free report on its balance sheet.
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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Big River Industries' TSR for the last 3 years was 96%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
The total return of 5.5% received by Big River Industries shareholders over the last year isn't far from the market return of -6.0%. Longer term investors wouldn't be so upset, since they would have made 6%, each year, over five years. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. It's always interesting to track share price performance over the longer term. But to understand Big River Industries better, we need to consider many other factors. Take risks, for example - Big River Industries has 2 warning signs we think you should be aware of.