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Does Brighthouse Financial's (NASDAQ:BHF) Share Price Gain of 53% Match Its Business Performance?

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·2 min read
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One way to deal with stock volatility is to ensure you have a properly diverse portfolio. But the goal is to pick stocks that do better than average. Brighthouse Financial, Inc. (NASDAQ:BHF) has done well over the last year, with the stock price up 53% beating the market return of 47% (not including dividends). However, the longer term returns haven't been so impressive, with the stock up just 4.4% in the last three years.

Check out our latest analysis for Brighthouse Financial

Given that Brighthouse Financial didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Brighthouse Financial actually shrunk its revenue over the last year, with a reduction of 97%. Despite the lack of revenue growth, the stock has returned a solid 53% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Brighthouse Financial shareholders have gained 53% over twelve months. This isn't far from the market return of 49%. That's not at all bad, but the cherry on top is that it's an improvement on prior returns (since shareholders only made 1.4% yearly over the last three years). We're certainly happy to see the uptick and we hope the underlying business goes on to justify the improved valuation. 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. To that end, you should be aware of the 1 warning sign we've spotted with Brighthouse Financial .

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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.