Advertisement
Canada markets close in 4 hours 17 minutes
  • S&P/TSX

    22,314.65
    -32.11 (-0.14%)
     
  • S&P 500

    5,319.50
    +12.49 (+0.24%)
     
  • DOW

    39,402.01
    -269.03 (-0.68%)
     
  • CAD/USD

    0.7302
    -0.0004 (-0.05%)
     
  • CRUDE OIL

    77.02
    -0.55 (-0.71%)
     
  • Bitcoin CAD

    93,341.60
    -2,886.88 (-3.00%)
     
  • CMC Crypto 200

    1,477.09
    -25.57 (-1.70%)
     
  • GOLD FUTURES

    2,344.80
    -48.10 (-2.01%)
     
  • RUSSELL 2000

    2,068.30
    -13.41 (-0.64%)
     
  • 10-Yr Bond

    4.4950
    +0.0610 (+1.38%)
     
  • NASDAQ

    16,936.25
    +134.71 (+0.80%)
     
  • VOLATILITY

    12.08
    -0.21 (-1.71%)
     
  • FTSE

    8,343.34
    -26.99 (-0.32%)
     
  • NIKKEI 225

    39,103.22
    +486.12 (+1.26%)
     
  • CAD/EUR

    0.6743
    -0.0002 (-0.03%)
     

The past three years for PATRIZIA (ETR:PAT) investors has not been profitable

If you love investing in stocks you're bound to buy some losers. Long term PATRIZIA SE (ETR:PAT) shareholders know that all too well, since the share price is down considerably over three years. Unfortunately, they have held through a 70% decline in the share price in that time. And more recent buyers are having a tough time too, with a drop of 37% in the last year.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.

See our latest analysis for PATRIZIA

There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

ADVERTISEMENT

Over the three years that the share price declined, PATRIZIA's earnings per share (EPS) dropped significantly, falling to a loss. Extraordinary items contributed to this situation. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But it's safe to say we'd generally expect the share price to be lower as a result!

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

It might be well worthwhile taking a look at our free report on PATRIZIA'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. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of PATRIZIA, it has a TSR of -68% for the last 3 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Investors in PATRIZIA had a tough year, with a total loss of 34% (including dividends), against a market gain of about 1.8%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 9% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for PATRIZIA you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.