Earnings growth outpaced the 27% return delivered to UNIQA Insurance Group (VIE:UQA) shareholders over the last year

By
Simply Wall St
Published
January 18, 2022
WBAG:UQA
Source: Shutterstock

There's no doubt that investing in the stock market is a truly brilliant way to build wealth. But not every stock you buy will perform as well as the overall market. Unfortunately for shareholders, while the UNIQA Insurance Group AG (VIE:UQA) share price is up 24% in the last year, that falls short of the market return. Having said that, the longer term returns aren't so impressive, with stock gaining just 4.6% in three years.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

See our latest analysis for UNIQA Insurance Group

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.

UNIQA Insurance Group was able to grow EPS by 41% in the last twelve months. This EPS growth is significantly higher than the 24% increase in the share price. So it seems like the market has cooled on UNIQA Insurance Group, despite the growth. Interesting.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
WBAG:UQA Earnings Per Share Growth January 18th 2022

We know that UNIQA Insurance Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think UNIQA Insurance Group will grow revenue in the future.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. As it happens, UNIQA Insurance Group's TSR for the last 1 year was 27%, 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

UNIQA Insurance Group shareholders gained a total return of 27% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 7% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand UNIQA Insurance Group better, we need to consider many other factors. Even so, be aware that UNIQA Insurance Group is showing 2 warning signs in our investment analysis , you should know about...

Of course UNIQA Insurance Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AT exchanges.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.