When you buy and hold a stock for the long term, you definitely want it to provide a positive return. But more than that, you probably want to see it rise more than the market average. Unfortunately for shareholders, while the Gladstone Commercial Corporation (NASDAQ:GOOD) share price is up 32% in the last five years, that's less than the market return. On a brighter note, more newer shareholders are probably rather content with the 27% share price gain over twelve months.

View our latest analysis for Gladstone Commercial

While Gladstone Commercial made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

For the last half decade, Gladstone Commercial can boast revenue growth at a rate of 9.9% per year. That's a pretty good long term growth rate. While the share price has gained 6% per year for five years, that's hardly amazing considering the market also rose. You could even argue that the share price was over optimistic, previously.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We know that Gladstone Commercial has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Gladstone Commercial stock, you should check out this free report showing analyst profit forecasts.

What About Dividends?

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, Gladstone Commercial's TSR for the last 5 years was 96%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Gladstone Commercial provided a TSR of 37% over the year (including dividends). That's fairly close to the broader market return. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 14%. It is possible that management foresight will bring growth well into the future, even if the share price slows down. 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 learn about the 5 warning signs we've spotted with Gladstone Commercial (including 2 which are potentially serious) .

But note: Gladstone Commercial 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 US exchanges.

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. 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.

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