In This Article:
While it may not be enough for some shareholders, we think it is good to see the Boston Pizza Royalties Income Fund (TSE:BPF.UN) share price up 14% in a single quarter. But if you look at the last five years the returns have not been good. After all, the share price is down 26% in that time, significantly under-performing the market.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
View our latest analysis for Boston Pizza Royalties Income Fund
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 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).
Looking back five years, both Boston Pizza Royalties Income Fund's share price and EPS declined; the latter at a rate of 1.8% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 6% per year, over the period. This implies that the market was previously too optimistic about the stock. The less favorable sentiment is reflected in its current P/E ratio of 10.64.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into Boston Pizza Royalties Income Fund's key metrics by checking this interactive graph of Boston Pizza Royalties Income Fund's earnings, revenue and cash flow.
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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Boston Pizza Royalties Income Fund the TSR over the last 5 years was 4.9%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
It's nice to see that Boston Pizza Royalties Income Fund shareholders have received a total shareholder return of 25% over the last year. That's including the dividend. That gain is better than the annual TSR over five years, which is 1.0%. 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. It's always interesting to track share price performance over the longer term. But to understand Boston Pizza Royalties Income Fund better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with Boston Pizza Royalties Income Fund (including 1 which is a bit unpleasant) .