U.S. markets open in 6 hours 19 minutes
  • S&P Futures

    4,244.75
    +8.50 (+0.20%)
     
  • Dow Futures

    33,942.00
    +107.00 (+0.32%)
     
  • Nasdaq Futures

    14,287.75
    +29.50 (+0.21%)
     
  • Russell 2000 Futures

    2,299.00
    +6.50 (+0.28%)
     
  • Crude Oil

    73.08
    +0.02 (+0.03%)
     
  • Gold

    1,783.00
    +5.60 (+0.32%)
     
  • Silver

    25.98
    +0.12 (+0.46%)
     
  • EUR/USD

    1.1926
    -0.0017 (-0.14%)
     
  • 10-Yr Bond

    1.4720
    0.0000 (0.00%)
     
  • Vix

    16.66
    -1.23 (-6.88%)
     
  • GBP/USD

    1.3963
    +0.0016 (+0.11%)
     
  • USD/JPY

    110.8850
    +0.2500 (+0.23%)
     
  • BTC-USD

    33,941.53
    +1,268.16 (+3.88%)
     
  • CMC Crypto 200

    814.48
    +20.15 (+2.54%)
     
  • FTSE 100

    7,090.01
    0.00 (0.00%)
     
  • Nikkei 225

    28,874.89
    -9.24 (-0.03%)
     

Should HomeTrust Bancshares (NASDAQ:HTBI) Be Disappointed With Their 63% Profit?

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

A diverse portfolio of stocks will always have winners and losers. But the goal is to pick stocks that do better than average. HomeTrust Bancshares, Inc. (NASDAQ:HTBI) has done well over the last year, with the stock price up 63% beating the market return of 59% (not including dividends). Zooming out, the stock is actually down 6.3% in the last three years.

Check out our latest analysis for HomeTrust Bancshares

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Over the last twelve months, HomeTrust Bancshares actually shrank its EPS by 28%.

So we don't think that investors are paying too much attention to EPS. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

We are skeptical of the suggestion that the 1.3% dividend yield would entice buyers to the stock. Revenue was pretty flat year on year, but maybe a closer look at the data can explain the market optimism.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

We consider it positive that insiders have made significant purchases in the last year. 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 Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of HomeTrust Bancshares, it has a TSR of 66% for the last year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

HomeTrust Bancshares provided a TSR of 66% over the year (including dividends). That's fairly close to the broader market return. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 7%. It is possible that management foresight will bring growth well into the future, even if the share price slows down. It's always interesting to track share price performance over the longer term. But to understand HomeTrust Bancshares better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for HomeTrust Bancshares (of which 1 is a bit unpleasant!) you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.