Washington Trust Bancorp (NASDAQ:WASH) shareholders have endured a 22% loss from investing in the stock three years ago
While not a mind-blowing move, it is good to see that the Washington Trust Bancorp, Inc. (NASDAQ:WASH) share price has gained 28% in the last three months. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 34% in the last three years, significantly under-performing the market.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they’ve been consistent with returns.
View our latest analysis for Washington Trust Bancorp
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
Washington Trust Bancorp saw its EPS decline at a compound rate of 15% per year, over the last three years. This fall in EPS isn’t far from the rate of share price decline, which was 13% per year. That suggests that the market sentiment around the company hasn’t changed much over that time, despite the disappointment. Rather, the share price has approximately tracked EPS growth.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
This free interactive report on Washington Trust Bancorp’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Washington Trust Bancorp the TSR over the last 3 years was -22%, 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
Washington Trust Bancorp’s TSR for the year was broadly in line with the market average, at 32%. The silver lining is that the share price is up in the short term, which flies in the face of the annualised loss of 3% over the last five years. While ‘turnarounds seldom turn’ there are green shoots for Washington Trust Bancorp. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Washington Trust Bancorp is showing 1 warning sign in our investment analysis , 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 American exchanges.
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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.