Investors more bullish on Schneider National (NYSE:SNDR) this week as stock increases 5.3%, despite earnings trending downwards over past three years
Low-cost index funds make it easy to achieve average market returns. But across the board there are plenty of stocks that underperform the market. Unfortunately for shareholders, while the Schneider National, Inc. (NYSE:SNDR) share price is up 22% in the last three years, that falls short of the market return. At least the stock price is up over the last year, albeit only by 4.9%.
Since the stock has added US$227m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
Check out our latest analysis for Schneider National
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 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 the last three years, Schneider National failed to grow earnings per share, which fell 13% (annualized).
So we doubt that the market is looking to EPS for its main judge of the company's value. Given this situation, it makes sense to look at other metrics too.
The modest 1.1% dividend yield is unlikely to be propping up the share price. The revenue drop of 1.7% is as underwhelming as some politicians. The only thing that's clear is there is low correlation between Schneider National's share price and its historic fundamental data. Further research may be required!
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Schneider National is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Schneider National in this interactive graph of future profit estimates.
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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Schneider National the TSR over the last 3 years was 38%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
Schneider National shareholders are up 16% for the year (even including dividends). It's always nice to make money but this return falls short of the market return which was about 35% for the year. On the bright side that gain is actually better than the average return of 11% over the last three years, implying that the company is doing better recently. If the share price is up as a result of improved business performance, then this kind of improvement may be sustained. Before forming an opinion on Schneider National you might want to consider these 3 valuation metrics.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. 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.
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