Emirates Integrated Telecommunications Company PJSC DFM:DU’s three-year profit decline not encouraging, but shareholders are still up 31% over the period
Shareholders might be concerned that the Emirates Integrated Telecommunications Company PJSC (DFM:DU) share price down 11% over the past month. On the other hand, the share price is higher than it was three years ago. However, many shareholders are unlikely to be thrilled with the 16% gain in share price during this period, given the rising market.
Although Emirates Integrated Telecommunications Company PJSC lost د.إ2.1 billion of its market capitalization this week, let’s take a look at its longer-term fundamental trends and see if they have generated any returns.
Check out our latest analysis for Emirates Integrated Telecommunications Company PJSC
While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying trading performance. By comparing earnings per share (EPS) and share price changes over time, we can get an idea of how investors’ attitudes toward a company change over time.
In the three years of share price growth, Emirates Integrated Telecommunications Company PJSC has actually seen its earnings per share (EPS) fall by 12% per year.
This means that the market is unlikely to judge the company based on earnings growth. Given this situation, it makes sense to look at other measures as well.
You can only imagine what long-term shareholders think of the declining revenue trend (sliding 5.2% per year). The only thing that is clear is that there is a low correlation between Emirates Integrated Telecommunications Company PJSC’s stock price and its historical fundamentals. Further research may be required!
The company’s revenues and profits (over time) are shown in the image below (click to see exact figures).
If you are thinking of buying or selling Emirates Integrated Telecommunications Company PJSC shares, you should check out this FREE detailed report on its balance sheet.
What about dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price performance. TSR is a calculation of return that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of all discounted capital raisings and spinoffs. So for companies that pay a generous dividend, the TSR is often much higher than the stock price return. It turns out that Emirates Integrated Telecommunications Company PJSC’s TSR for the past 3 years was 31%, which exceeds the share price return mentioned earlier. This is largely the result of its dividend payments!
A different perspective
Investors in Emirates Integrated Telecommunications Company PJSC had a difficult year, with a total loss of 8.8% (including dividends), against a market gain of around 47%. Even good stock prices sometimes drop, but we want to see improvements in a company’s fundamentals before we get too interested. Longer-term investors wouldn’t be so upset, as they would have gained 7%, every year, over five years. If fundamentals continue to point to sustainable long-term growth, the current sell-off could be an opportunity to consider. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. Even so, be aware that Emirates Integrated Telecommunications Company PJSC shows 1 warning sign in our investment analysis you should know…
We’d like Emirates Integrated Telecommunications Company PJSC better if we see big insider buying. In the meantime, watch this free list of growing companies with significant and recent insider buying.
Please note that the market returns quoted in this article reflect the market-weighted average returns of the stocks currently trading on the AE exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.