Yahoo Finance Can You Imagine How Zurich Insurance Group’s (VTX:ZURN) Shareholders Feel About The 43% Share Price Increase?
By buying an index fund, you can roughly match the market return with ease. But if you pick the right individual stocks, you could make more than that. Just take a look at Zurich Insurance Group AG (VTX:ZURN), which is up 43%, over three years, soundly beating the market return of 12% (not including dividends). On the other hand, the returns haven’t been quite so good recently, with shareholders up just 11%, including dividends.
See our latest analysis for Zurich Insurance Group
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During three years of share price growth, Zurich Insurance Group achieved compound earnings per share growth of 27% per year. The average annual share price increase of 13% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that Zurich Insurance Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Zurich Insurance Group will grow revenue in the future.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Zurich Insurance Group’s TSR for the last 3 years was 75%, which exceeds the share price return mentioned earlier. And there’s no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
We’re pleased to report that Zurich Insurance Group shareholders have received a total shareholder return of 11% over one year. And that does include the dividend. Having said that, the five-year TSR of 11% a year, is even better. Before forming an opinion on Zurich Insurance Group you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.
For those who like to find winning investments this free list of growing 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 CH exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
