Those who invested in One Liberty Properties (NYSE:OLP) a year ago saw a 59% increase

Today, it’s easy to just buy an index fund and your returns should (roughly) match the market. But investors can boost their returns by choosing market-beating companies to own shares in. For example One Liberty Properties, Inc. The stock (NYSE:OLP) is up 46% over the past year, clearly outpacing the market return of around 30% (excluding dividends). That should put a smile on shareholders’ faces. However, the long-term returns are negative, as the stock is 9.7% lower than it was three years ago.

With this in mind, it is worth checking whether the company’s fundamental assumptions have an impact on its long-term performance, or if there are any discrepancies.

Check out our latest analysis for One Liberty Properties

In his essay Graham-and-Doddsville Super Investors Warren Buffett has described how stock prices do not always rationally reflect the value of a company. By comparing earnings per share (EPS) and share price changes over time, we can get a sense of how investor sentiment toward a company has changed over time.

One Liberty Properties was able to grow its EPS by 16% over the last twelve months. This EPS growth is significantly lower than the 46% increase in the share price. This indicates that the market is now more optimistic about the stock.

The company’s earnings per share (over time) are shown in the chart below (click to see the exact numbers).

We are pleased to report that the CEO is paid more modestly than most CEOs at similarly capitalized companies. It is always worth keeping an eye on CEO compensation, but the more important question is whether the company will grow earnings over the years. Before buying or selling a stock, we always recommend a thorough examination of historical growth trends, available here.

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 takes into account the value of cash dividends (assuming that any dividend received was reinvested) plus the calculated value of any discounted capital raisings and spin-offs. It is fair to say that the TSR gives a more complete picture of a stock that pays a dividend. As it happens, One Liberty Properties’ TSR for the last year was 59%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thus increased total shareholder return.

Another perspective

It’s great to see that One Liberty Properties shareholders have received a total shareholder return of 59% over the last year. And that includes the dividend. This is better than the annualized return of 8% over half a decade, which means the company has been doing better recently. Given that share price momentum remains strong, it’s worth taking a closer look at the stock to make sure you don’t miss out on an opportunity. It’s always interesting to track share price performance over the long term. But to better understand One Liberty Properties, we need to consider a number of other factors. For example, we’ve noticed 4 Warning Signs for One Liberty Properties you should know and 2 of them are important.

The story continues

Of course, you may find a fantastic investment by looking elsewhere. So take a look at this free a list of companies that we believe will see profit growth.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This Simply Wall St article is for general information purposes only. Our commentary is based solely on historical data and analyst forecasts, and is based on an objective methodology. 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 your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.