If You Had Bought Nedbank Group's (JSE:NED) Shares Three Years Ago You Would Be Down 38%

Nedbank Group Limited (JSE:NED) shareholders should be happy to see the share price up 22% in the last quarter. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 38% in the last three years, falling well short of the market return.

View our latest analysis for Nedbank Group

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Nedbank Group saw its EPS decline at a compound rate of 33% per year, over the last three years. In comparison the 15% compound annual share price decline isn't as bad as the EPS drop-off. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Nedbank Group's key metrics by checking this interactive graph of Nedbank Group's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered Nedbank Group's share price action, but we should also mention its total shareholder return (TSR). 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. Its history of dividend payouts mean that Nedbank Group's TSR, which was a 28% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

We're pleased to report that Nedbank Group shareholders have received a total shareholder return of 33% over one year. That's better than the annualised return of 4% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Nedbank Group better, we need to consider many other factors. Take risks, for example - Nedbank Group has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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 ZA exchanges.

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