UK markets close in 7 hours 19 minutes
  • FTSE 100

    7,139.60
    +9.89 (+0.14%)
     
  • FTSE 250

    22,780.20
    +4.92 (+0.02%)
     
  • AIM

    1,261.67
    -0.93 (-0.07%)
     
  • GBP/EUR

    1.1583
    +0.0087 (+0.75%)
     
  • GBP/USD

    1.4067
    +0.0077 (+0.55%)
     
  • BTC-GBP

    41,423.49
    +40.00 (+0.10%)
     
  • CMC Crypto 200

    1,552.40
    +116.62 (+8.12%)
     
  • S&P 500

    4,232.60
    +30.98 (+0.74%)
     
  • DOW

    34,777.76
    +229.26 (+0.66%)
     
  • CRUDE OIL

    65.27
    +0.37 (+0.57%)
     
  • GOLD FUTURES

    1,834.90
    +3.60 (+0.20%)
     
  • NIKKEI 225

    29,518.34
    +160.52 (+0.55%)
     
  • HANG SENG

    28,557.87
    -52.78 (-0.18%)
     
  • DAX

    15,379.30
    -20.35 (-0.13%)
     
  • CAC 40

    6,376.19
    -9.32 (-0.15%)
     

Introducing Globe Life (NYSE:GL), A Stock That Climbed 85% In The Last Five Years

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3-min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

The main point of investing for the long term is to make money. But more than that, you probably want to see it rise more than the market average. But Globe Life Inc. (NYSE:GL) has fallen short of that second goal, with a share price rise of 85% over five years, which is below the market return. Some buyers are laughing, though, with an increase of 54% in the last year.

See our latest analysis for Globe Life

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

Over half a decade, Globe Life managed to grow its earnings per share at 11% a year. So the EPS growth rate is rather close to the annualized share price gain of 13% per year. That suggests that the market sentiment around the company hasn't changed much over that time. In fact, the share price seems to largely reflect the EPS growth.

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

This free interactive report on Globe Life's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Globe Life, it has a TSR of 93% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Globe Life shareholders gained a total return of 56% during the year. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 14% per year over five year. This could indicate that the company is winning over new investors, as it pursues its strategy. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Globe Life , and understanding them should be part of your investment process.

We will like Globe Life better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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 (at) simplywallst.com.