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Does Union Bankshares's (NASDAQ:UNB) Share Price Gain of 36% Match Its Business Performance?

Simply Wall St


While Union Bankshares, Inc. (NASDAQ:UNB) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 26% in the last quarter. But the silver lining is the stock is up over five years. Unfortunately its return of 36% is below the market return of 58%.

View our latest analysis for Union Bankshares


During five years of share price growth, Union Bankshares actually saw its EPS drop 0.6% per year. So it's hard to argue that the earnings per share are the best metric to judge the company, as it may not be optimized for profits at this point. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

On the other hand, Union Bankshares's revenue is growing nicely, at a compound rate of 4.6% over the last five years. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment.


NasdaqGM:UNB Income Statement, June 20th 2019


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. As it happens, Union Bankshares's TSR for the last 5 years was 61%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

While the broader market gained around 5.0% in the last year, Union Bankshares shareholders lost 33% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 9.9%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before spending more time on Union Bankshares it might be wise to click here to see if insiders have been buying or selling shares.



