DuPont de Nemours' (NYSE:DD) Shareholders Are Down 32% On Their Investment Over The Past Three Years.

NYSE:DD) shareholders, since the share price is down 70% in the last three years, falling well short of the market return of around 52%. The good news is that the stock is up 1.6% in the last week.” data-reactid=”28″>As an investor its worth striving to ensure your overall portfolio beats the market average. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. Unfortunately, that’s been the case for longer term DuPont de Nemours, Inc. (NYSE:DD) shareholders, since the share price is down 70% in the last three years, falling well short of the market return of around 52%. The good news is that the stock is up 1.6% in the last week.

Check out our latest analysis for DuPont de Nemours ” data-reactid=”29″> Check out our latest analysis for DuPont de Nemours

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. 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.

We know that DuPont de Nemours has been profitable in the past. However, it made a loss in the last twelve months, suggesting profit may be an unreliable metric at this stage. Other metrics may better explain the share price move.

We think that the revenue decline over three years, at a rate of 34% per year, probably had some shareholders looking to sell. And that’s not surprising, since it seems unlikely that EPS growth can continue for long in the absence of revenue growth.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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report showing analyst consensus estimates for future profits.” data-reactid=”50″>DuPont de Nemours is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling DuPont de Nemours stock, you should check out this free report showing analyst consensus estimates for future profits.

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. As it happens, DuPont de Nemours’ TSR for the last 3 years was -32%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

We’ve identified 2 warning signs with DuPont de Nemours (at least 1 which can’t be ignored) , and understanding them should be part of your investment process.” data-reactid=”54″>Investors in DuPont de Nemours had a tough year, with a total loss of 14% (including dividends), against a market gain of about 24%. 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 1.6%, 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. 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. Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with DuPont de Nemours (at least 1 which can’t be ignored) , and understanding them should be part of your investment process.

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