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Pulling back 7.5% this week, Seacoast Banking Corporation of Florida's NASDAQ:SBCF) three-year decline in earnings may be coming into investors focus
Seacoast Banking Corporation of Florida (NASDAQ:SBCF) shareholders have seen the share price descend 23% over the month. In contrast the stock is up over the last three years. However, it's unlikely many shareholders are elated with the share price gain of 51% over that time, given the rising market.
While this past week has detracted from the company's three-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
View our latest analysis for Seacoast Banking Corporation of Florida
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. 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.
Over the last three years, Seacoast Banking Corporation of Florida failed to grow earnings per share, which fell 13% (annualized).
This means it's unlikely the market is judging the company based on earnings growth. Given this situation, it makes sense to look at other metrics too.
It may well be that Seacoast Banking Corporation of Florida revenue growth rate of 14% over three years has convinced shareholders to believe in a brighter future. If the company is being managed for the long term good, today's shareholders might be right to hold on.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So it makes a lot of sense to check out what analysts think Seacoast Banking Corporation of Florida will earn in the future (free profit forecasts).
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Seacoast Banking Corporation of Florida, it has a TSR of 57% for the last 3 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We regret to report that Seacoast Banking Corporation of Florida shareholders are down 29% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 12%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.8% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Seacoast Banking Corporation of Florida better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Seacoast Banking Corporation of Florida you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
What are the risks and opportunities for Seacoast Banking Corporation of Florida?
Seacoast Banking Corporation of Florida operates as the bank holding company for Seacoast National Bank that provides integrated financial services to retail and commercial customers in Florida.
Rewards
Trading at 43.2% below our estimate of its fair value
Earnings are forecast to grow 36.43% per year
Risks
Shareholders have been diluted in the past year
Significant insider selling over the past 3 months
Further research on
Seacoast Banking Corporation of Florida
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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 NasdaqGS:SBCF
Seacoast Banking Corporation of Florida
Seacoast Banking Corporation of Florida operates as the bank holding company for Seacoast National Bank that provides integrated financial services to retail and commercial customers in Florida.
Flawless balance sheet with high growth potential.
