Investing in Capital Bancorp (NASDAQ:CBNK) three years ago would have delivered you a 97% gain
While Capital Bancorp, Inc. (NASDAQ:CBNK) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 13% in the last quarter. But over three years, the returns would have left most investors smiling In fact, the company's share price bested the return of its market index in that time, posting a gain of 96%.
So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.
Check out our latest analysis for Capital Bancorp
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.
During three years of share price growth, Capital Bancorp achieved compound earnings per share growth of 39% per year. The average annual share price increase of 25% is actually lower than the EPS growth. Therefore, it seems the market has moderated its expectations for growth, somewhat. This cautious sentiment is reflected in its (fairly low) P/E ratio of 7.99.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We know that Capital Bancorp has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Capital Bancorp's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Pleasingly, Capital Bancorp's total shareholder return last year was 15%. And yes, that does include the dividend. That falls short of the 25% it has made, for shareholders, each year, over three years. If you would like to research Capital Bancorp in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
We will like Capital Bancorp better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
