Stock Analysis

Tryg (CPH:TRYG) shareholders have earned a 5.0% CAGR over the last three years

  •  Updated
CPSE:TRYG
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For many investors, the main point of stock picking is to generate higher returns than the overall market. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. Unfortunately, that's been the case for longer term Tryg A/S (CPH:TRYG) shareholders, since the share price is down 19% in the last three years, falling well short of the market return of around 61%.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

Before we look at the performance, you might like to know that our analysis indicates that TRYG is potentially undervalued!

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Tryg saw its EPS decline at a compound rate of 15% per year, over the last three years. This fall in the EPS is worse than the 7% compound annual share price fall. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
CPSE:TRYG Earnings Per Share Growth September 5th 2022

Dive deeper into Tryg's key metrics by checking this interactive graph of Tryg's earnings, revenue and cash flow.

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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Tryg the TSR over the last 3 years was 16%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Tryg shareholders have received a total shareholder return of 12% over the last year. And that does include the dividend. However, the TSR over five years, coming in at 14% per year, is even more impressive. It's always interesting to track share price performance over the longer term. But to understand Tryg better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Tryg you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

Valuation is complex, but we're helping make it simple.

Find out whether Tryg is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About CPSE:TRYG

Tryg

Tryg A/S, together with its subsidiaries, provides insurance products and services for private and corporate customers, and small and medium sized businesses in Denmark, Norway, and Sweden.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation1
Future Growth3
Past Performance1
Financial Health4
Dividends2

Read more about these checks in the individual report sections or in our analysis model.

Adequate balance sheet with moderate growth potential.