Stock Analysis
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- NasdaqCM:FSBW
FS Bancorp (NASDAQ:FSBW) sheds 16% this week, as yearly returns fall more in line with earnings growth
FS Bancorp, Inc. (NASDAQ:FSBW) shareholders have seen the share price descend 19% over the month. But that doesn't change the fact that the returns over the last three years have been pleasing. In the last three years the share price is up, 87%: better than the market.
Although FS Bancorp has shed US$42m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
See our latest analysis for FS Bancorp
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. 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.
FS Bancorp was able to grow its EPS at 15% per year over three years, sending the share price higher. In comparison, the 23% per year gain in the share price outpaces the EPS growth. So it's fair to assume the market has a higher opinion of the business than it did three years ago. It's not unusual to see the market 're-rate' a stock, after a few years of growth.
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 FS Bancorp'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). 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 FS Bancorp the TSR over the last 3 years was 100%, 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
Although it hurts that FS Bancorp returned a loss of 4.3% in the last twelve months, the broader market was actually worse, returning a loss of 7.3%. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. If you would like to research FS Bancorp in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
We will like FS Bancorp better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
What are the risks and opportunities for FS Bancorp?
FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches.
Rewards
Trading at 62.5% below our estimate of its fair value
Earnings are forecast to grow 15.14% per year
Risks
No risks detected for FSBW from our risks checks.
Further research on
FS Bancorp
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
About NasdaqCM:FSBW
FS Bancorp
FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches.
Flawless balance sheet, undervalued and pays a dividend.
