Atlantic Union Bankshares (NASDAQ:AUB) stock performs better than its underlying earnings growth over last three years
Buying a low-cost index fund will get you the average market return. But across the board there are plenty of stocks that underperform the market. For example, the Atlantic Union Bankshares Corporation (NASDAQ:AUB) share price return of 10% over three years lags the market return in the same period. Looking at more recent returns, the stock is up 9.7% in a year.
Since it's been a strong week for Atlantic Union Bankshares shareholders, let's have a look at trend of the longer term fundamentals.
View our latest analysis for Atlantic Union Bankshares
There is no denying that markets are sometimes efficient, but prices do not always reflect 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).
During three years of share price growth, Atlantic Union Bankshares achieved compound earnings per share growth of 20% per year. The average annual share price increase of 3% is actually lower than the EPS growth. Therefore, it seems the market has moderated its expectations for growth, somewhat. We'd venture the lowish P/E ratio of 10.11 also reflects the negative sentiment around the stock.
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 the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Atlantic Union Bankshares' earnings, revenue and cash flow.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Atlantic Union Bankshares the TSR over the last 3 years was 21%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Atlantic Union Bankshares shareholders gained a total return of 13% during the year. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 3% over half a decade This suggests the company might be improving over time. It's always interesting to track share price performance over the longer term. But to understand Atlantic Union Bankshares better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Atlantic Union Bankshares you should be aware of.
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
