As an investor its worth striving to ensure your overall portfolio beats the market average. But if you try your hand at stock picking, your risk returning less than the market. We regret to report that long term DENTSPLY SIRONA Inc. (NASDAQ:XRAY) shareholders have had that experience, with the share price dropping 21% in three years, versus a market return of about 32%. Even worse, it's down 15% in about a month, which isn't fun at all. We do note, however, that the broader market is down 8.5% in that period, and this may have weighed on the share price.
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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
DENTSPLY SIRONA became profitable within the last five years. We would usually expect to see the share price rise as a result. So given the share price is down it's worth checking some other metrics too.
With a rather small yield of just 0.8% we doubt that the stock's share price is based on its dividend. We note that, in three years, revenue has actually grown at a 3.1% annual rate, so that doesn't seem to be a reason to sell shares. It's probably worth investigating DENTSPLY SIRONA further; while we may be missing something on this analysis, there might also be an opportunity.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts
What about the Total Shareholder Return (TSR)?
We've already covered DENTSPLY SIRONA's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. DENTSPLY SIRONA's TSR of was a loss of 19% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.
A Different Perspective
It's good to see that DENTSPLY SIRONA has rewarded shareholders with a total shareholder return of 21% in the last twelve months. That's including the dividend. That certainly beats the loss of about 0.3% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for DENTSPLY SIRONA you should know about.
DENTSPLY SIRONA 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.
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