Korean Reinsurance's (KRX:003690) Shareholders Are Down 39% On Their Shares

While not a mind-blowing move, it is good to see that the Korean Reinsurance Company (KRX:003690) share price has gained 11% in the last three months. But over the last half decade, the stock has not performed well. You would have done a lot better buying an index fund, since the stock has dropped 39% in that half decade.

Check out our latest analysis for Korean Reinsurance

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Looking back five years, both Korean Reinsurance's share price and EPS declined; the latter at a rate of 2.0% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 9% per year, over the period. So it seems the market was too confident about the business, in the past. The low P/E ratio of 5.69 further reflects this reticence.

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

This free interactive report on Korean Reinsurance's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

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. We note that for Korean Reinsurance the TSR over the last 5 years was -28%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Korean Reinsurance shareholders are up 1.6% for the year (even including dividends). Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 5% endured over half a decade. 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 Korean Reinsurance better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Korean Reinsurance (of which 1 is significant!) you should know about.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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