U.S. markets closed
  • S&P Futures

    4,235.50
    +10.25 (+0.24%)
     
  • Dow Futures

    34,785.00
    +99.00 (+0.29%)
     
  • Nasdaq Futures

    13,740.75
    +31.00 (+0.23%)
     
  • Russell 2000 Futures

    2,274.50
    +6.60 (+0.29%)
     
  • Crude Oil

    65.65
    +0.75 (+1.16%)
     
  • Gold

    1,832.20
    +0.90 (+0.05%)
     
  • Silver

    27.66
    +0.18 (+0.67%)
     
  • EUR/USD

    1.2167
    -0.0001 (-0.01%)
     
  • 10-Yr Bond

    1.5770
    +0.0160 (+1.02%)
     
  • Vix

    16.69
    -1.70 (-9.24%)
     
  • GBP/USD

    1.4032
    +0.0042 (+0.30%)
     
  • USD/JPY

    108.7520
    +0.1700 (+0.16%)
     
  • BTC-USD

    58,729.76
    +52.45 (+0.09%)
     
  • CMC Crypto 200

    1,543.05
    +107.27 (+7.47%)
     
  • FTSE 100

    7,129.71
    +53.54 (+0.76%)
     
  • Nikkei 225

    29,620.68
    +262.86 (+0.90%)
     

The Independent Bank (NASDAQ:INDB) Share Price Has Gained 50% And Shareholders Are Hoping For More

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

It hasn't been the best quarter for Independent Bank Corp. (NASDAQ:INDB) shareholders, since the share price has fallen 14% in that time. On the other hand the returns over the last half decade have not been bad. After all, the stock has performed better than the market (45%) in that time, and is up 50%. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 20% decline over the last twelve months.

Check out our latest analysis for Independent Bank

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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, Independent Bank managed to grow its earnings per share at 15% a year. The EPS growth is more impressive than the yearly share price gain of 8.4% over the same period. Therefore, it seems the market has become relatively pessimistic about the company.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

NasdaqGS:INDB Past and Future Earnings May 8th 2020
NasdaqGS:INDB Past and Future Earnings May 8th 2020

This free interactive report on Independent Bank's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

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. As it happens, Independent Bank's TSR for the last 5 years was 67%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We regret to report that Independent Bank shareholders are down 18% for the year (even including dividends) . Unfortunately, that's worse than the broader market decline of 0.2%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 11%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Independent Bank better, we need to consider many other factors. For instance, we've identified 2 warning signs for Independent Bank (1 is concerning) that you should be aware of.

Of course Independent Bank 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.

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.

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. Thank you for reading.