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Introducing MidWestOne Financial Group (NASDAQ:MOFG), A Stock That Climbed 21% In The Last Year

Simply Wall St
·3 mins read

We believe investing is smart because history shows that stock markets go higher in the long term. But if when you choose to buy stocks, some of them will be below average performers. Over the last year the MidWestOne Financial Group, Inc. (NASDAQ:MOFG) share price is up 21%, but that's less than the broader market return. In contrast, the longer term returns are negative, since the share price is 4.8% lower than it was three years ago.

See our latest analysis for MidWestOne Financial Group

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

MidWestOne Financial Group was able to grow EPS by 18% in the last twelve months. We note that the earnings per share growth isn't far from the share price growth (of 21%). This makes us think the market hasn't really changed its sentiment around the company, in the last year. It looks like the share price is responding to the EPS.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

NasdaqGS:MOFG Past and Future Earnings, January 29th 2020
NasdaqGS:MOFG Past and Future Earnings, January 29th 2020

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on MidWestOne Financial Group's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of MidWestOne Financial Group, it has a TSR of 24% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

MidWestOne Financial Group shareholders have received returns of 24% over twelve months (even including dividends) , which isn't far from the general 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 5.6%. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. 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. For instance, we've identified 1 warning sign for MidWestOne Financial Group that you should be aware of.

MidWestOne Financial Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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.