Yahoo Finance If You Had Bought Civitas Social Housing (LON:CSH) Shares A Year Ago You'd Have Earned 13% Returns
Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. To wit, the Civitas Social Housing PLC (LON:CSH) share price is 13% higher than it was a year ago, much better than the market decline of around 10% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Unfortunately the longer term returns are not so good, with the stock falling 6.0% in the last three years.
See our latest analysis for Civitas Social Housing
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.
Civitas Social Housing was able to grow EPS by 27% in the last twelve months. It's fair to say that the share price gain of 13% did not keep pace with the EPS growth. So it seems like the market has cooled on Civitas Social Housing, despite the growth. Interesting.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Civitas Social Housing has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Civitas Social Housing's TSR for the last year was 19%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Pleasingly, Civitas Social Housing's total shareholder return last year was 19%. And yes, that does include the dividend. That gain actually surpasses the 3.1% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting Civitas Social Housing on your watchlist. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Civitas Social Housing (of which 1 shouldn't be ignored!) you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.
This article by Simply Wall St is general in nature. 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.
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