Stock Analysis

The five-year decline in earnings for Security National Financial NASDAQ:SNFC.A) isn't encouraging, but shareholders are still up 60% over that period

NasdaqGM:SNFC.A
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The Security National Financial Corporation (NASDAQ:SNFC.A) share price has had a bad week, falling 11%. But the silver lining is the stock is up over five years. In that time, it is up 60%, which isn't bad, but is below the market return of 62%.

Since the long term performance has been good but there's been a recent pullback of 11%, let's check if the fundamentals match the share price.

Check out our latest analysis for Security National Financial

SWOT Analysis for Security National Financial

Strength
  • Debt is not viewed as a risk.
Weakness
  • Earnings declined over the past year.
Opportunity
  • Trading below our estimate of fair value by more than 20%.
  • Lack of analyst coverage makes it difficult to determine SNFC.A's earnings prospects.
Threat
  • No apparent threats visible for SNFC.A.

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

During five years of share price growth, Security National Financial actually saw its EPS drop 5.0% per year.

This means it's unlikely the market is judging the company based on earnings growth. Because earnings per share don't seem to match up with the share price, we'll take a look at other metrics instead.

On the other hand, Security National Financial's revenue is growing nicely, at a compound rate of 11% over the last five years. In that case, the company may be sacrificing current earnings per share to drive growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
NasdaqGM:SNFC.A Earnings and Revenue Growth May 20th 2023

Take a more thorough look at Security National Financial's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market gained around 6.9% in the last year, Security National Financial shareholders lost 14%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 10% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Is Security National Financial cheap compared to other companies? These 3 valuation measures might help you decide.

We will like Security National Financial 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 American exchanges.

Valuation is complex, but we're helping make it simple.

Find out whether Security National Financial is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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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.