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Is Fidelity D & D Bancorp's (NASDAQ:FDBC) 228% Share Price Increase Well Justified?

Simply Wall St

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When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. One great example is Fidelity D & D Bancorp, Inc. (NASDAQ:FDBC) which saw its share price drive 228% higher over five years. In the last week shares have slid back 2.7%.

See our latest analysis for Fidelity D & D Bancorp

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).

Over half a decade, Fidelity D & D Bancorp managed to grow its earnings per share at 8.2% a year. This EPS growth is lower than the 27% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

NasdaqGM:FDBC Past and Future Earnings, May 10th 2019

Dive deeper into Fidelity D & D Bancorp's key metrics by checking this interactive graph of Fidelity D & D Bancorp's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Fidelity D & D Bancorp the TSR over the last 5 years was 282%, 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

It's good to see that Fidelity D & D Bancorp has rewarded shareholders with a total shareholder return of 19% in the last twelve months. That's including the dividend. However, that falls short of the 31% TSR per annum it has made for shareholders, each year, over five years. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. If you would like to research Fidelity D & D Bancorp in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

Of course Fidelity D & D Bancorp 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 US exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.