The past five years for Heritage Insurance Holdings (NYSE:HRTG) investors has not been profitable
Heritage Insurance Holdings, Inc. (NYSE:HRTG) shareholders should be happy to see the share price up 28% in the last month. But don't envy holders -- looking back over 5 years the returns have been really bad. In fact, the share price has declined rather badly, down some 72% in that time. So we're not so sure if the recent bounce should be celebrated. But it could be that the fall was overdone.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for Heritage Insurance Holdings
Given that Heritage Insurance Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last half decade, Heritage Insurance Holdings saw its revenue increase by 9.3% per year. That's a pretty good rate for a long time period. So it is unexpected to see the stock down 11% per year in the last five years. The truth is that the growth might be below expectations, and investors are probably worried about the continual losses.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Heritage Insurance Holdings stock, you should check out this free report showing analyst profit forecasts.
What About The Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Heritage Insurance Holdings' total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Heritage Insurance Holdings shareholders, and that cash payout explains why its total shareholder loss of 69%, over the last 5 years, isn't as bad as the share price return.
A Different Perspective
It's nice to see that Heritage Insurance Holdings shareholders have received a total shareholder return of 28% over the last year. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Heritage Insurance Holdings better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Heritage Insurance Holdings 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 American exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
