Hanwha Life Insurance Co., Ltd. (KRX:088350) shareholders will doubtless be very grateful to see the share price up 91% in the last quarter. But that is small recompense for the exasperating returns over three years. Regrettably, the share price slid 59% in that period. So it's good to see it climbing back up. Perhaps the company has turned over a new leaf.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Hanwha Life Insurance saw its EPS decline at a compound rate of 30% per year, over the last three years. This fall in EPS isn't far from the rate of share price decline, which was 26% per year. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. In this case, it seems that the EPS is guiding the share price.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that Hanwha Life Insurance has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Hanwha Life Insurance the TSR over the last 3 years was -57%, 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
Hanwha Life Insurance shareholders have received returns of 39% over twelve months (even including dividends), which isn't far from the general market return. The silver lining is that the share price is up in the short term, which flies in the face of the annualised loss of 9% over the last five years. While 'turnarounds seldom turn' there are green shoots for Hanwha Life Insurance. It's always interesting to track share price performance over the longer term. But to understand Hanwha Life Insurance better, we need to consider many other factors. Even so, be aware that Hanwha Life Insurance is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on KR exchanges.
If you decide to trade Hanwha Life Insurance, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.