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It's normal to be annoyed when stock you own has a declining share price. But in the short term the market is a voting machine, and the share price movements may not reflect the underlying business performance. So while the Tabcorp Holdings Limited (ASX:TAH) share price is down 80% in the last year, the total return to shareholders (which includes dividends) was 59%. That's better than the market which declined 4.4% over the last year. To make matters worse, the returns over three years have also been really disappointing (the share price is 80% lower than three years ago).
While the stock has risen 4.8% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
View our latest analysis for Tabcorp Holdings
Given that Tabcorp Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In just one year Tabcorp Holdings saw its revenue fall by 3.9%. That looks pretty grim, at a glance. The share price fall of 80% in a year tells the story. Holders should not lose the lesson: loss making companies should grow revenue. Of course, extreme share price falls can be an opportunity for those who are willing to really dig deeper to understand a high risk company like this.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So it makes a lot of sense to check out what analysts think Tabcorp Holdings will earn in the future (free profit forecasts).
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. In the case of Tabcorp Holdings, it has a TSR of 59% for the last 1 year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.