No-one enjoys it when they lose money on a stock. But no-one can make money on every call, especially in a declining market. While the HKT Trust and HKT Limited (HKG:6823) share price is down 16% in the last three years, the total return to shareholders (which includes dividends) was 1.9%. And that total return actually beats the market decline of 4.1%.

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.

Check out our latest analysis for HKT Trust and HKT

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

HKT Trust and HKT saw its EPS decline at a compound rate of 2.0% per year, over the last three years. The share price decline of 6% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into HKT Trust and HKT's key metrics by checking this interactive graph of HKT Trust and HKT's earnings, revenue and cash flow.

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 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 HKT Trust and HKT the TSR over the last 3 years was 1.9%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

While it's never nice to take a loss, HKT Trust and HKT shareholders can take comfort that , including dividends,their trailing twelve month loss of 4.4% wasn't as bad as the market loss of around 18%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 6% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. It's always interesting to track share price performance over the longer term. But to understand HKT Trust and HKT better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with HKT Trust and HKT (including 1 which is potentially serious) .

But note: HKT Trust and HKT 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 HK 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.