United Bancshares (NASDAQ:UBOH) Has Gifted Shareholders With A Fantastic 124% Total Return On Their Investment
The main point of investing for the long term is to make money. Furthermore, you'd generally like to see the share price rise faster than the market But United Bancshares, Inc. (NASDAQ:UBOH) has fallen short of that second goal, with a share price rise of 100% over five years, which is below the market return. On a brighter note, more newer shareholders are probably rather content with the 95% share price gain over twelve months.
See our latest analysis for United Bancshares
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Over half a decade, United Bancshares managed to grow its earnings per share at 23% a year. This EPS growth is higher than the 15% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company. The reasonably low P/E ratio of 7.02 also suggests market apprehension.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into United Bancshares' key metrics by checking this interactive graph of United Bancshares's earnings, revenue and cash flow.
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. As it happens, United Bancshares' TSR for the last 5 years was 124%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We're pleased to report that United Bancshares shareholders have received a total shareholder return of 100% over one year. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 18% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that United Bancshares is showing 2 warning signs in our investment analysis , you should know about...
But note: United Bancshares may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
