Dhunseri Tea & Industries Limited (NSE:DHUNTEAIND) shareholders should be happy to see the share price up 15% in the last month. But that is minimal compensation for the share price under-performance over the last year. The cold reality is that the stock has dropped 17% in one year, under-performing the market.
View our latest analysis for Dhunseri Tea & Industries
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.
Even though the Dhunseri Tea & Industries share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past. It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's well worth checking out some other metrics, too.
In contrast, the 3.7% drop in revenue is a real concern. Many investors see falling revenue as a likely precursor to lower earnings, so this could well explain the weak share price.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
Take a more thorough look at Dhunseri Tea & Industries's financial health with this free report on its balance sheet.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Dhunseri Tea & Industries the TSR over the last year was -15%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Dhunseri Tea & Industries shareholders are down 15% for the year (even including dividends), falling short of the market return. Meanwhile, the broader market slid about 0.6%, likely weighing on the stock. The three-year loss of 2.6% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. Importantly, we haven't analysed Dhunseri Tea & Industries's dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.