Update: U.S. Bancorp (NYSE:USB) Stock Gained 22% In The Last Five Years
The main point of investing for the long term is to make money. But more than that, you probably want to see it rise more than the market average. But U.S. Bancorp (NYSE:USB) has fallen short of that second goal, with a share price rise of 22% over five years, which is below the market return. Zooming in, the stock is up a respectable 7.2% in the last year.
Check out our latest analysis for U.S. Bancorp
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During five years of share price growth, U.S. Bancorp achieved compound earnings per share (EPS) growth of 6.1% per year. The EPS growth is more impressive than the yearly share price gain of 4.0% over the same period. So it seems the market isn't so enthusiastic about the stock these days.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It might be well worthwhile taking a look at our free report on U.S. Bancorp's earnings, revenue and cash flow.
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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of U.S. Bancorp, it has a TSR of 38% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
A Different Perspective
U.S. Bancorp shareholders gained a total return of 10% during the year. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 6.7% per year over five year. This suggests the company might be improving over time. If you would like to research U.S. Bancorp in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
