International Bancshares (NASDAQ: IBOC) Shareholders Achieved 55% Return in Past Year
Passive investing in index funds can generate returns that roughly match the overall market. But you can dramatically increase your returns by choosing above-average stocks. Namely, the Bancshares International Society (NASDAQ: IBOC) The stock price is 50% higher than a year ago, much better than the market return of around 26% (excluding dividends) during the same period. If he can maintain this outperformance over the long term, investors will do very well! Long-term returns have not been so good, with the share price only 0.8% higher than it was three years ago.
So let’s take a look at the underlying fundamentals over the past year and see if they’ve moved in step with shareholder returns.
Check out our latest review for International Bancshares
It is undeniable that markets are sometimes efficient, but prices do not always reflect the underlying performance of companies. An imperfect but reasonable way to gauge how sentiment is changing around a company is to compare earnings per share (EPS) with the stock price.
International Bancshares has been able to increase its EPS by 33% over the past twelve months. This EPS growth is significantly less than the 50% increase in the share price. It is therefore fair to assume that the market has a better opinion of the company than a year ago.
The company’s earnings per share (over time) is shown in the image below (click to see exact numbers).
It’s probably worth noting that CEOs are paid less than the median in companies of similar size. It’s always worth keeping an eye on CEO compensation, but a bigger question is whether the company will increase profits over the years. Dive deeper into profits by checking out this interactive earnings, income and cash flow chart from International Bancshares.
What about dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. While the share price return reflects only the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital increase or spin- off updated. So, for companies that pay a generous dividend, the TSR is often much higher than the return on the share price. As it turns out, International Bancshares’ TSR for the past year was 55%, which exceeds the share price return mentioned earlier. This is largely the result of his dividend payments!
A different perspective
We are pleased to report that International Bancshares shareholders received a total shareholder return of 55% over one year. Of course, this includes the dividend. This gain is better than the annual TSR over five years which is 10%. Therefore, it seems that sentiment around the company has been positive lately. Since the stock price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before deciding if you like the current stock price, check International Bancshares’ scores on these 3 valuation metrics.
But beware : International Bancshares may not be the best stock to buy. So take a look at this free list of interesting companies with past earnings growth (and new growth forecasts).
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on US stock exchanges.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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