Shareholders in Octopus Renewables Infrastructure Trust (LON:ORIT) are in the red if they invested three years ago

Yahoo

19-05-2025

As an investor its worth striving to ensure your overall portfolio beats the market average. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Octopus Renewables Infrastructure Trust plc (LON:ORIT) shareholders, since the share price is down 36% in the last three years, falling well short of the market return of around 20%. Contrary to the longer term story, the last month has been good for stockholders, with a share price gain of 9.9%. However, this may be a matter of broader market optimism, since stocks are up 5.3% in the same time.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
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To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During the three years that the share price fell, Octopus Renewables Infrastructure Trust's earnings per share (EPS) dropped by 36% each year. In comparison the 14% compound annual share price decline isn't as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
This free interactive report on Octopus Renewables Infrastructure Trust's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Octopus Renewables Infrastructure Trust's TSR for the last 3 years was -22%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
It's good to see that Octopus Renewables Infrastructure Trust has rewarded shareholders with a total shareholder return of 14% in the last twelve months. And that does include the dividend. Notably the five-year annualised TSR loss of 1.3% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Octopus Renewables Infrastructure Trust better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Octopus Renewables Infrastructure Trust (of which 1 makes us a bit uncomfortable!) you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges.
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