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Eagle Materials (NYSE:EXP) Share Prices Have Dropped 20% In The Last Three Years

Simply Wall St
·3-min read

While not a mind-blowing move, it is good to see that the Eagle Materials Inc. (NYSE:EXP) share price has gained 22% in the last three months. 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 20% in the last three years, falling well short of the market return.

Check out our latest analysis for Eagle Materials

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

During the three years that the share price fell, Eagle Materials' earnings per share (EPS) dropped by 11% each year. In comparison the 7% compound annual share price decline isn't as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

We know that Eagle Materials has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Eagle Materials will grow revenue in the future.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Eagle Materials' total shareholder return (TSR) and its share price return. 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. Dividends have been really beneficial for Eagle Materials shareholders, and that cash payout explains why its total shareholder loss of 19%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

While the broader market gained around 21% in the last year, Eagle Materials shareholders lost 1.0%. 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 3% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. For example, we've discovered 3 warning signs for Eagle Materials that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. 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.