Yahoo Finance How Much Did Fifth Third Bancorp's(NASDAQ:FITB) Shareholders Earn From Share Price Movements Over The Last Year?
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While it may not be enough for some shareholders, we think it is good to see the Fifth Third Bancorp (NASDAQ:FITB) share price up 13% in a single quarter. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact, the price has declined 33% in a year, falling short of the returns you could get by investing in an index fund.
Check out our latest analysis for Fifth Third Bancorp
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).
Unhappily, Fifth Third Bancorp had to report a 29% decline in EPS over the last year. This proportional reduction in earnings per share isn't far from the 33% decrease in the share price. Given the lower EPS we might have expected investors to lose confidence in the stock, but that doesn't seemed to have happened. Rather, the share price has approximately tracked EPS growth.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Fifth Third Bancorp'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. We note that for Fifth Third Bancorp the TSR over the last year was -30%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
Investors in Fifth Third Bancorp had a tough year, with a total loss of 30% (including dividends) , against a market gain of about 11%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 0.7% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. For example, we've discovered 1 warning sign for Fifth Third Bancorp that you should be aware of before investing here.
Fifth Third Bancorp is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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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