Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. For example, the American Electric Power Company, Inc. (NASDAQ:AEP) share price is down 15% in the last year. That's disappointing when you consider the market returned 16%. However, the longer term returns haven't been so bad, with the stock down 4.4% in the last three years.
It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.
See our latest analysis for American Electric Power Company
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Unfortunately American Electric Power Company reported an EPS drop of 9.5% for the last year. This reduction in EPS is not as bad as the 15% share price fall. This suggests the EPS fall has made some shareholders are more nervous about the business.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of American Electric Power Company's earnings, revenue and cash flow.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of American Electric Power Company, it has a TSR of -12% for the last 1 year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Investors in American Electric Power Company had a tough year, with a total loss of 12% (including dividends), against a market gain of about 16%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand American Electric Power Company better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for American Electric Power Company you should be aware of, and 1 of them makes us a bit uncomfortable.
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 American exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
投資収益を見る場合、全株主収益(TSR)と株価収益の違いを考慮することが重要です。TSRは、株式分割や割引資本調達などの価値、および配当を、配当が再投資されたという前提に基づいて組み込んでいます。株式配当を支払う株式に対しては、TSRがより完全な画像を提供していると言えます。 American Electric Power Companyの場合、過去1年間のTSRは-12%です。これは、先に説明した株価収益を上回ります。会社が支払った配当は、総株主収益を増やしました。総株主収益(TSR)株価収益株価収益株式分割や割引資本調達などの価値、および配当を、配当が再投資されたという前提に基づいて組み込んでいます。株式配当を支払う株式に対しては、TSRがより完全な画像を提供していると言えます。総株主収益
American Electric Power Companyの投資家は、約16%の市場収益に対して、合計12%の損失(配当を含む)を被った厳しい1年でした。ただし、最高の株式でも、12か月間マーケットの下になる場合があります。明るい面では、長期的な株主は半世紀以上にわたって年間4%の利益を上げました。最近のセルオフが機会である可能性があるため、長期的な成長傾向の兆候を示す基本的なデータを確認する価値がある場合があります。長期的な株価パフォーマンスを追跡するのは常に興味深いことですが、American Electric Power Companyをより理解するためには、多くの他の要因を考慮する必要があります。例えば、我々は3つの警告サインを見つけました。 American Electric Power Companyには気をつける必要があり、そのうち1つは私たちを少し不快にさせます。
American Electric Power Companyの投資家は、約16%の市場収益に対して、合計12%の損失(配当を含む)を被った厳しい1年でした。とはいえ、最高の株式でも、12か月間マーケットの下になる場合があります。鮮明な面では、長期的な株主には大きな利益がありました。そして、私たちは前半の5年間に年間4%の利益を上げています。最近のセルオフが機会である可能性があるため、長期的な成長傾向の兆候を示す基本的なデータを確認する価値がある場合があります。長期的な株価パフォーマンスを追跡するのは常に興味深いことですが、American Electric Power Companyをより理解するためには、多くの他の要因を考慮する必要があります。我々は、成長する企業の内部取引に関するこの無料リストを探している人たちのために提供しています。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。