Imagine Owning Orange Belgium (EBR:OBEL) And Wondering If The 30% Share Price Slide Is Justified

It can certainly be frustrating when a stock does not perform as hoped. But no-one can make money on every call, especially in a declining market. The Orange Belgium S.A. (EBR:OBEL) is down 30% over three years, but the total shareholder return is -26% once you include the dividend. And that total return actually beats the market return of -38%. And over the last year the share price fell 23%, so we doubt many shareholders are delighted. In the last ninety days we've seen the share price slide 30%. Of course, this share price action may well have been influenced by the 37% decline in the broader market, throughout the period.

See our latest analysis for Orange Belgium

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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).

Orange Belgium saw its EPS decline at a compound rate of 24% per year, over the last three years. In comparison the 11% compound annual share price decline isn't as bad as the EPS drop-off. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

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

Dive deeper into Orange Belgium's key metrics by checking this interactive graph of Orange Belgium'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. In the case of Orange Belgium, it has a TSR of -26% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

While it's never nice to take a loss, Orange Belgium shareholders can take comfort that , including dividends, their trailing twelve month loss of 21% wasn't as bad as the market loss of around 32%. Given the total loss of 5.0% per year over five years, it seems returns have deteriorated in the last twelve months. While some investors do well specializing in buying companies that are struggling (but nonetheless undervalued), don't forget that Buffett said that 'turnarounds seldom turn'. 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. To that end, you should be aware of the 4 warning signs we've spotted with Orange Belgium .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.