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It's normal to be annoyed when stock you own has a declining share price. But often it is not a reflection of the fundamental business performance. So while the Brookfield Infrastructure Corporation (NYSE:BIPC) share price is down 12% in the last year, the total return to shareholders (which includes dividends) was -8.9%. And that total return actually beats the market decline of 22%. Because Brookfield Infrastructure hasn't been listed for many years, the market is still learning about how the business performs. Unfortunately the last month hasn't been any better, with the share price down 12%.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for Brookfield Infrastructure
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
Brookfield Infrastructure managed to increase earnings per share from a loss to a profit, over the last 12 months.
When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action. But we may find different metrics more enlightening.
Brookfield Infrastructure managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We know that Brookfield Infrastructure has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Brookfield Infrastructure will earn in the future (free profit forecasts).
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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Brookfield Infrastructure, it has a TSR of -8.9% for the last 1 year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!