MORI TRUST REIT (TSE:8961) earnings and shareholder returns have been trending downwards for the last year, but the stock rallies 3.8% this past week

Simply Wall St · 3d ago

One simple way to benefit from a rising market is to buy an index fund. But in any given year a good portion of stocks will fall short of that. For example, that's what happened with MORI TRUST REIT, Inc. (TSE:8961) over the last year - it's share price is down 14% versus a market decline of 8.0%. Even if shareholders bought some time ago, they wouldn't be particularly happy: the stock is down 12% in three years.

While the stock has risen 3.8% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

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While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Unhappily, MORI TRUST REIT had to report a 2.0% decline in EPS over the last year. The share price decline of 14% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
TSE:8961 Earnings Per Share Growth April 14th 2025

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. We note that for MORI TRUST REIT the TSR over the last 1 year was -8.7%, 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

The total return of 8.7% received by MORI TRUST REIT shareholders over the last year isn't far from the market return of -8.0%. The silver lining is that longer term investors would have made a total return of 5% per year over half a decade. If the stock price has been impacted by changing sentiment, rather than deteriorating business conditions, it could spell opportunity. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for MORI TRUST REIT (of which 2 are potentially serious!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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