Investors in Home Bancshares (Conway AR) (NYSE:HOMB) have seen decent returns of 52% over the past five years

Home BancShares, Inc. +0.28%

Home BancShares, Inc.

HOMB

24.72

+0.28%

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Furthermore, you'd generally like to see the share price rise faster than the market. Unfortunately for shareholders, while the Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) share price is up 32% in the last five years, that's less than the market return. Over the last twelve months the stock price has risen a very respectable 7.6%.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

View our latest analysis for Home Bancshares (Conway AR)

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 five years of share price growth, Home Bancshares (Conway AR) achieved compound earnings per share (EPS) growth of 2.4% per year. This EPS growth is lower than the 6% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
NYSE:HOMB Earnings Per Share Growth January 30th 2024

We know that Home Bancshares (Conway AR) has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Home Bancshares (Conway AR) will grow revenue in the future.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Home Bancshares (Conway AR)'s TSR for the last 5 years was 52%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Home Bancshares (Conway AR) provided a TSR of 11% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 9% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Home Bancshares (Conway AR) that you should be aware of before investing here.

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 American exchanges.

Every question you ask will be answered
Scan the QR code to contact us
whatsapp
Also you can contact us via