Reflecting on AIB Group's (ISE:A5G) Share Price Returns Over The Last Three Years

It is a pleasure to report that the AIB Group plc (ISE:A5G) is up 43% in the last quarter. But over the last three years we've seen a quite serious decline. Regrettably, the share price slid 57% in that period. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

View our latest analysis for AIB Group

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Over the three years that the share price declined, AIB Group's earnings per share (EPS) dropped significantly, falling to a loss. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But it's safe to say we'd generally expect the share price to be lower as a result!

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between AIB Group's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for AIB Group shareholders, and that cash payout explains why its total shareholder loss of 54%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

Over the last year AIB Group shareholders have received a TSR of 49%. It's always nice to make money but this return falls short of the market return which was about 63% for the year. On the bright side, that's certainly better than the yearly loss of about 15% endured over the last three years, implying that the company is doing better recently. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand AIB Group better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for AIB Group you should know about.

Of course AIB 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 IE exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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