Advertisement
U.S. markets close in 2 hours 53 minutes
  • S&P 500

    5,253.01
    +4.52 (+0.09%)
     
  • Dow 30

    39,782.74
    +22.66 (+0.06%)
     
  • Nasdaq

    16,384.60
    -14.93 (-0.09%)
     
  • Russell 2000

    2,128.01
    +13.66 (+0.65%)
     
  • Crude Oil

    82.77
    +1.42 (+1.75%)
     
  • Gold

    2,241.60
    +28.90 (+1.31%)
     
  • Silver

    24.98
    +0.23 (+0.92%)
     
  • EUR/USD

    1.0803
    -0.0027 (-0.25%)
     
  • 10-Yr Bond

    4.1910
    -0.0050 (-0.12%)
     
  • GBP/USD

    1.2633
    -0.0005 (-0.04%)
     
  • USD/JPY

    151.3420
    +0.0960 (+0.06%)
     
  • Bitcoin USD

    70,643.02
    +1,480.46 (+2.14%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

The total return for Ameris Bancorp (NASDAQ:ABCB) investors has risen faster than earnings growth over the last three years

Vanguard founder Jack Bogle helped spearhead the low-cost index fund, putting average returns within reach of every investor. But you can make superior returns by picking better-than average stocks. To wit, Ameris Bancorp (NASDAQ:ABCB) shares are up 37% in three years, besting the market return. In contrast, the stock is actually down 4.3% in the last year, suggesting a lack of positive momentum.

While the stock has fallen 3.8% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

See our latest analysis for Ameris Bancorp

There is no denying that markets are sometimes efficient, but prices do not always reflect 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).

During three years of share price growth, Ameris Bancorp achieved compound earnings per share growth of 12% per year. We note that the 11% yearly (average) share price gain isn't too far from the EPS growth rate. Coincidence? Probably not. This observation indicates that the market's attitude to the business hasn't changed all that much. Quite to the contrary, the share price has arguably reflected the EPS growth.

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

earnings-per-share-growth
earnings-per-share-growth

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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 Ameris Bancorp the TSR over the last 3 years was 44%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Although it hurts that Ameris Bancorp returned a loss of 3.0% in the last twelve months, the broader market was actually worse, returning a loss of 17%. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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

Advertisement