Yahoo Finance Pacific Century Regional Developments' (SGX:P15) investors will be pleased with their 14% return over the last three years
One of the frustrations of investing is when a stock goes down. But it can difficult to make money in a declining market. The Pacific Century Regional Developments Limited (SGX:P15) is down 19% over three years, but the total shareholder return is 14% once you include the dividend. And that total return actually beats the market decline of 6.6%. Unfortunately the share price momentum is still quite negative, with prices down 15% in thirty days.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for Pacific Century Regional Developments
Given that Pacific Century Regional Developments didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
Over the last three years, Pacific Century Regional Developments' revenue dropped 25% per year. That's definitely a weaker result than most pre-profit companies report. With revenue in decline, the share price decline of 6% per year is hardly undeserved. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. Of course, it is possible for businesses to bounce back from a revenue drop - but we'd want to see that before getting interested.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Pacific Century Regional Developments' balance sheet strength is a great place to start, if you want to investigate the stock further.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. We note that for Pacific Century Regional Developments the TSR over the last 3 years was 14%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
Investors in Pacific Century Regional Developments had a tough year, with a total loss of 4.2% (including dividends), against a market gain of about 4.3%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 12% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Pacific Century Regional Developments better, we need to consider many other factors. Take risks, for example - Pacific Century Regional Developments has 3 warning signs we think you should be aware of.
But note: Pacific Century Regional Developments may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Singaporean 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 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.
