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NRB Bearings (NSE:NRBBEARING) earnings and shareholder returns have trended down over the past three years, but the stock is up 12% over the past week

NRB Bearings Limited (NSE:NRBBEARING) shareholders should be pleased that the stock price is up 12% over the past week. But that doesn’t change the fact that the returns of the last three years have been anything but pleasing. After all, the stock price has fallen 28% over the past three years, significantly underperforming the market.

While the past three years have been tough for NRB Bearings shareholders, the past week has shown some encouraging signs. So let’s look at longer-term fundamentals and see if they were the driver of negative returns.

Check out our latest analysis for NRB bearings

Freely adapted from Benjamin Graham: In the short term the market is a voting machine, but in the long term it is a scale. By comparing earnings per share (EPS) and stock price changes over time, we can get a sense of how investor attitudes toward a company have changed over time.

NRB Bearings has seen its earnings per share decline by an average of 12% per year over the past three years. That change in EPS is pretty close to the 10% average annual decline in the stock price. That suggests that despite the disappointment, market sentiment around the company hasn’t changed much during this period. Rather, the stock price has roughly tracked EPS growth.

Below you can see how the EPS has changed over time (discover the exact values ​​by clicking on the image).

Earnings per share growth
NSEI:NRBBEARING Earnings Per Share Growth, Jun 2, 2022

We like that insiders have bought stocks over the past 12 months. Even so, future earnings will be far more important to whether current shareholders make money. It might be worth taking a look at ours free Report on NRB Bearings earnings, sales and cash flow.

What about dividends?

In addition to the return on the share price, investors should also consider the total shareholder return (TSR). While stock price return only reflects the change in stock price, TSR includes the value of dividends (assuming they have been reinvested) and the benefit of a discounted capital raise or spin-off. So for companies that pay a generous dividend, TSR is often much higher than the stock price return. In the case of NRB bearings, it has a TSR of -25% over the past 3 years. That exceeds the previously mentioned stock price return. The dividends paid by the company thus have the total shareholder return.

A different perspective

NRB Bearings shareholders are up 4.0% for the year (even including dividends). Unfortunately, this lags behind the market return. On the plus side, that’s still a gain, and it’s even better than the 0.4% average return over half a decade. It’s possible that returns will improve along with business fundamentals. While it’s worth considering the various effects that market conditions can have on the stock price, there are other factors that are even more important. For example, we discovered 1 warning label for NRB bearings you should know before you invest here.

If you enjoy buying stocks alongside management, then you might like this free List of companies. (Hint: Insiders bought them).

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on IN exchanges.

This Simply Wall St article is of a general nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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