Examining how Union Bankshares Inc (NASDAQ:UNB) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Union Bankshares is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its banks industry peers. Check out our latest analysis for Union Bankshares
Was UNB’s weak performance lately a part of a long-term decline?
I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend enables me to analyze different companies on a similar basis, using new information. For Union Bankshares, its most recent trailing-twelve-month earnings is US$8.45M, which, against the prior year’s level, has plunged by -0.73%. Since these figures may be somewhat short-term, I have estimated an annualized five-year value for UNB’s net income, which stands at US$7.31M This suggests that, on average, Union Bankshares has been able to increase its earnings over the last few years.
What’s enabled this growth? Let’s take a look at if it is solely owing to an industry uplift, or if Union Bankshares has seen some company-specific growth. In the last few years, Union Bankshares expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Viewing growth from a sector-level, the US banks industry has been growing, albeit, at a muted single-digit rate of 3.41% in the past twelve months, and 8.11% over the past half a decade. This suggests that whatever recent headwind the industry is enduring, it’s hitting Union Bankshares harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I suggest you continue to research Union Bankshares to get a more holistic view of the stock by looking at:
- Financial Health: Is UNB’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Valuation: What is UNB worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether UNB is currently mispriced by the market.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.