While it may not be enough for some shareholders, we think it is good to see the AmanahRaya Real Estate Investment Trust (KLSE:ARREIT) share price up 14% in a single quarter. But that doesn’t change the fact that the returns over the last five years have been less than pleasing. You would have done a lot better buying an index fund, since the stock has dropped 39% in that half decade.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they’ve been consistent with returns.

We’ve discovered 6 warning signs about AmanahRaya Real Estate Investment Trust. View them for free.

There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

Looking back five years, both AmanahRaya Real Estate Investment Trust’s share price and EPS declined; the latter at a rate of 45% per year. This was, in part, due to extraordinary items impacting earnings. This fall in the EPS is worse than the 9% compound annual share price fall. So investors might expect EPS to bounce back — or they may have previously foreseen the EPS decline. With a P/E ratio of 131.96, it’s fair to say the market sees a brighter future for the business.

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

It might be well worthwhile taking a look at our free report on AmanahRaya Real Estate Investment Trust’s earnings, revenue and cash flow.

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for AmanahRaya Real Estate Investment Trust the TSR over the last 5 years was -19%, 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!

We’re pleased to report that AmanahRaya Real Estate Investment Trust shareholders have received a total shareholder return of 19% over one year. And that does include the dividend. That certainly beats the loss of about 4% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we’ve spotted 6 warning signs for AmanahRaya Real Estate Investment Trust (of which 2 are potentially serious!) you should know about.