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Bank of Queensland Limited (ASX:BOQ) shareholders will be happy to see the share price up 10% in the last month. However, the fact remains that the returns over the past five years have been unsatisfactory. After all, the stock price is down 40% during this time, significantly underperforming the market.
With that in mind, it’s worth checking whether a company’s underlying fundamentals are driving its long-term performance, or if there are any discrepancies.
Check out our latest analysis for Bank of Queensland.
in his essay Graham & Doddsville SuperInvestors Warren Buffett has said that stock prices do not always rationally reflect the value of a company. By comparing earnings per share (EPS) and share price changes over time, we can learn how investor attitudes to a company have changed over time.
Over the five years that the share price fell, Queensland Bank’s earnings per share (EPS) fell by 27% each year. This EPS decline is more severe than the 10% compounded annual share price decline. Therefore, investors may be hoping for a recovery in his EPS. Or maybe he had foreseen a decline in EPS all along.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It’s probably worth noting that CEO salaries are lower than the median for similarly sized companies. But while CEO pay is always worth checking, the really important question is whether the company can grow its earnings going forward. Dive deeper into its earnings by checking this interactive graph of Queensland Bank’s earnings, revenue and cash flow.
What will happen to the dividend?
When looking at return on investment, it is important to consider the following differences: Total shareholder return (TSR) and stock price return. 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 increases and spin-offs. So for companies that pay a generous dividend, the TSR is often much higher than the share price return. We note that Bank of Queensland’s TSR over the last 5 years was -19%, which is better than the share price return mentioned above. Therefore, the dividend paid by the company is total Shareholder returns.
different perspective
Queensland Bank investors have had a tough year, posting a total loss of 3.5% (including dividends) against a market gain of around 10%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. But losses over the past year aren’t as bad as the 4% annual losses investors have suffered over the past five years. Before assuming the stock price will stabilize, we need clear information that suggests the company will grow. 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.Case in point: we discovered 3 warning signs for Bank of Queensland you should know.
We would further like Queensland Bank if we see some significant insider buying.While you wait, check this out free A list of growing companies with significant recent insider purchasing.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian exchanges.
Have feedback on this article? Curious about its content? contact Please contact us directly. Alternatively, email our editorial team at Simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
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