Residential Secure Income's (LON:RESI) Shareholders Are Down 10% On Their Shares

Investors are understandably disappointed when a stock they own declines in value. But it's hard to avoid some disappointing investments when the overall market is down. While the Residential Secure Income plc (LON:RESI) share price is down 10% in the last three years, the total return to shareholders (which includes dividends) was 1.9%. That's better than the market which declined 7.0% over the last three years. The silver lining is that the stock is up 1.3% in about a week.

See our latest analysis for Residential Secure Income

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Residential Secure Income's TSR for the last 3 years was 1.9%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that Residential Secure Income shareholders have gained 3.5% (in total) over the last year. That includes the value of the dividend. That gain actually surpasses the 0.6% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Residential Secure Income better, we need to consider many other factors. Take risks, for example - Residential Secure Income has 4 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

Residential Secure Income is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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.

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