Al Ramz Corporation Investment and Development P.J.S.C's (DFM:ALRAMZ) five-year total shareholder returns outpace the underlying earnings growth

Simply Wall St · 07/05 04:02

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Furthermore, you'd generally like to see the share price rise faster than the market. But Al Ramz Corporation Investment and Development P.J.S.C. (DFM:ALRAMZ) has fallen short of that second goal, with a share price rise of 74% over five years, which is below the market return. The last year has been disappointing, with the stock price down 30% in that time.

While this past week has detracted from the company's five-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

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 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.

Over half a decade, Al Ramz Corporation Investment and Development P.J.S.C managed to grow its earnings per share at 31% a year. This EPS growth is higher than the 12% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
DFM:ALRAMZ Earnings Per Share Growth July 5th 2025

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 Al Ramz Corporation Investment and Development P.J.S.C's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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 Al Ramz Corporation Investment and Development P.J.S.C the TSR over the last 5 years was 102%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Al Ramz Corporation Investment and Development P.J.S.C shareholders are down 30% for the year (even including dividends), but the market itself is up 19%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 15%, each year, over five years. 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 Al Ramz Corporation Investment and Development P.J.S.C better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Al Ramz Corporation Investment and Development P.J.S.C (including 1 which is concerning) .

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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