To justify the effort of picking individual stocks, it's worth striving to beat returns from market index funds. However, any portfolio may have some stocks that underperform its benchmark.Unfortunately, it has been going on for a long time RTL Group SA (ETR:RRTL) shareholders, the share price is down 41% over the past three years, well below the market's decline of around 5.3%. And with the share price down 31% in the last year, we doubt many shareholders are happy. Most recently, the stock price fell another 12% in one month. This may be related to recent financial results. You can see the latest data by reading our report.
With the share price down 8.7% over the past week, it's worth looking at its earnings and looking for any warning signs.
Check out our latest analysis for RTL Group.
To paraphrase Benjamin Graham, in the short term the market is a voting machine, but in the long term it is a weighing machine. One way he looks at how market sentiment has changed over time is to look at the interaction between a company's share price and his earnings per share (EPS).
RTL Group has seen its EPS decline at an average rate of 11% per year over the last three years. This decline in EPS is slower than the 16% annual decline in the share price. In other words, it seems like the market used to have too much confidence in this business.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We're pleased to report that our CEO is paid more modestly than most CEOs at similarly capitalized companies. While it's always worth keeping an eye on CEO pay, the more important question is whether the company will grow its earnings over the years.this free This interactive report on RTL Group's earnings, revenue and cash flow is a great starting point, if you want to investigate the stock further.
What will happen to the dividend?
When looking at return on investment, it is important to consider the following differences: Total shareholder return (TSR) and stock price return. Whereas the price/earnings ratio 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 delivered by a stock. We note that RTL Group's TSR over the last three years was -26%, which is better than the share price return mentioned above. Therefore, the dividend paid by the company is total Shareholder returns.
different perspective
RTL Group investors have had a tough year, with a total loss of 26% (including dividends), compared to a market return of around 10%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance ended on a disappointing note, with shareholders facing a total annual loss of 3% over five years. Generally speaking, long-term stock price weakness can be a bad sign, but contrarian investors may want to research the stock in hopes of a turnaround. It's always interesting to track stock performance over the long term. However, to better understand RTL groups, many other factors need to be considered. For example, risk.Every company has them and we discovered that 2 warning signs for RTL Group (1 of which is important!) you need to know about.
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
