Investors Who Bought SpareBank 1 SMN (OB:MING) Shares A Year Ago Are Now Down 21%

It's understandable if you feel frustrated when a stock you own sees a lower share price. But sometimes a share price fall can have more to do with market conditions than the performance of the specific business. The SpareBank 1 SMN (OB:MING) is down 21% over a year, but the total shareholder return is -15% once you include the dividend. And that total return actually beats the market return of -20%. Longer term investors have fared much better, since the share price is up 1.4% in three years. In the last ninety days we've seen the share price slide 30%. However, one could argue that the price has been influenced by the general market, which is down 23% in the same timeframe.

View our latest analysis for SpareBank 1 SMN

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

During the unfortunate twelve months during which the SpareBank 1 SMN share price fell, it actually saw its earnings per share (EPS) improve by 22%. It's quite possible that growth expectations may have been unreasonable in the past.

It's surprising to see the share price fall so much, despite the improved EPS. But we might find some different metrics explain the share price movements better.

Vibrant companies don't usually cut their dividends, so the recent reduction might help explain why the SpareBank 1 SMN share price has been weak.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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. If you are thinking of buying or selling SpareBank 1 SMN stock, you should check out this free report showing analyst profit forecasts.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for SpareBank 1 SMN the TSR over the last year was -15%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While it's never nice to take a loss, SpareBank 1 SMN shareholders can take comfort that , including dividends, their trailing twelve month loss of 15% wasn't as bad as the market loss of around 20%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 8.5% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. It's always interesting to track share price performance over the longer term. But to understand SpareBank 1 SMN better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with SpareBank 1 SMN .

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 NO exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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