If you buy and hold a stock for many years, you'd hope to be making a profit. Furthermore, you'd generally like to see the share price rise faster than the market. But Nexstar Media Group, Inc. (NASDAQ:NXST) has fallen short of that second goal, with a share price rise of 67% over five years, which is below the market return. Zooming in, the stock is actually down 2.0% in the last year.
On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.
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 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.
During five years of share price growth, Nexstar Media Group achieved compound earnings per share (EPS) growth of 7.5% per year. This EPS growth is slower than the share price growth of 11% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
NasdaqGS:NXST Earnings Per Share Growth July 12th 2024
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Nexstar Media Group, it has a TSR of 90% for the last 5 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
Nexstar Media Group shareholders gained a total return of 1.7% during the year. Unfortunately this falls short of the market return. If we look back over five years, the returns are even better, coming in at 14% per year for five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. 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. Case in point: We've spotted 2 warning signs for Nexstar Media Group you should be aware of, and 1 of them is significant.
For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
株式を何年も持って中立し続けることで、利益が出ることを期待するでしょう。さらに、市場よりも株価が上がることを望むでしょう。しかし、Nexstar Media Group, Inc. (NASDAQ:NXST) は、株価が5年間で67% 上昇し、市場のリターンを下回りました。Zooming inすると、株価は実際には過去1年間で2.0% 下落しています。
株価成長の5年間、Nexstar Media Groupは、1年あたり7.5% の複合EPS成長を達成しました。このEPS成長は、同じ期間における株価成長11% に比べて遅くなっています。つまり、市場は5年前よりもビジネスに対して高い評価をしていると考えるのは妥当です。そして、それは成長履歴があることからも驚くべきことではありません。
株価リターンだけでなく、投資家はTSR(総株主還元)も考慮する必要があります。TSRには、分割や割引された資本増強の価値と、配当金に基づくものが含まれます。配当金が豊富な企業の場合、TSRは株価リターンよりもはるかに高くなる場合があります。 Nexstar Media Groupの場合、過去5年間のTSRは90%で、先に述べた株価リターンを上回っています。企業が支払った配当金が、総株主還元を向上させました。
Nexstar Media Groupの株主は去年合計1.7%のリターンを受け取りました。残念ながら、これは市場リターンを下回ります。5年間を見れば、リターンはさらに良く、5年間のリターン率は年率14%になります。株価の上昇ペースが鈍化している中でも、ビジネスが引き続き優れた業績を発揮している可能性があります。私たちは、ビジネスパフォーマンスのプロキシとして長期的な株価を見ることは非常に興味深いと考えています。しかし、真の洞察を得るには、他の情報も考慮する必要があります。 確認事項: Nexstar Media Groupの懸念事項 2つを確認しました。それらを把握し、1つは重要なものです。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。