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Some Navient (NASDAQ:NAVI) Shareholders Are Down 28%

It's nice to see the Navient Corporation (NASDAQ:NAVI) share price up 15% in a week. But over the last half decade, the stock has not performed well. After all, the share price is down 28% in that time, significantly under-performing the market.

View our latest analysis for Navient

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Looking back five years, both Navient's share price and EPS declined; the latter at a rate of 4.1% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 6.5% per year, over the period. This implies that the market is more cautious about the business these days. The low P/E ratio of 6.71 further reflects this reticence.

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The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

NasdaqGS:NAVI Past and Future Earnings, October 29th 2019
NasdaqGS:NAVI Past and Future Earnings, October 29th 2019

We know that Navient has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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, Navient's TSR for the last 5 years was -9.8%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that Navient shareholders have received a total shareholder return of 27% over the last year. Of course, that includes the dividend. Notably the five-year annualised TSR loss of 2.0% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. If you would like to research Navient in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

We will like Navient better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

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.

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. Thank you for reading.