ACCO Brands (NYSE:ACCO) shareholders have endured a 14% loss from investing in the stock three years ago
While not a mind-blowing move, it is good to see that the ACCO Brands Corporation (NYSE:ACCO) share price has gained 19% in the last three months. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 25% in the last three years, significantly under-performing the market.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
Check out our latest analysis for ACCO Brands
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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).
ACCO Brands saw its EPS decline at a compound rate of 9.2% per year, over the last three years. So do you think it's a coincidence that the share price has dropped 9% per year, a very similar rate to the EPS? We don't. So it seems like sentiment towards the stock hasn't changed all that much over time. It seems like the share price is reflecting the declining earnings per share.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that ACCO Brands has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for ACCO Brands the TSR over the last 3 years was -14%, 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
ACCO Brands shareholders gained a total return of 16% during the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 1.1% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand ACCO Brands better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for ACCO Brands you should be aware of, and 1 of them doesn't sit too well with us.
Of course ACCO Brands may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.
