Schneider National (NYSE: SNDR) investors are sitting on a 5.9% loss if they had invested three years ago

For many investors, the primary goal of stock selection is to generate returns that are higher than the overall market. But the risk of stock selection is that you will likely buy underperforming companies. We regret to report that in the long term Schneider National, Inc. Shareholders (NYSE: SNDR) had this experience, with the stock price falling 17% in three years, compared to a market return of around 61%.

Now let’s take a look at the fundamentals of the business and see if the long-term return to shareholders matches the performance of the underlying business.

Check out our latest analysis for Schneider National

It is undeniable that markets are sometimes efficient, but prices do not always reflect the underlying performance of companies. An imperfect but simple way to consider how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.

During the three years that the stock price fell, Schneider National’s earnings per share (EPS) fell 13% each year. In comparison, the compound annual drop in the stock price of 6% is not as bad as the drop in EPS. This suggests that the market remains optimistic about long-term earnings stability, despite past EPS declines.

The company’s earnings per share (over time) is shown in the image below (click to see exact numbers).

We know that Schneider National has improved its results lately, but will it increase its turnover? This free A report showing analysts’ revenue forecasts should help you determine if EPS growth can be sustained.

What about dividends?

When considering investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. TSR is a yield calculation that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of any discounted capital increase and spinoff. It’s fair to say that the TSR gives a more complete picture of dividend paying stocks. Note that for Schneider National the TSR over the last 3 years was -5.9%, which is better than the return on the share price mentioned above. This is largely the result of his dividend payments!

A different perspective

In the past year, Schneider National shareholders suffered a loss of 7.1%, including dividends. In contrast, the market gained around 37%. Of course, the long term matters more than the short term, and even big stocks will sometimes have a bad year. The loss of 1.9% per year over three years is not as bad as the past twelve months, suggesting the company has not been able to convince the market that it has solved its problems. Although Baron Rothschild once said to “buy when there is blood on the streets, even if the blood is yours”, he also focuses on high quality stocks with a solid outlook. Before you form your opinion on Schneider National, you might want to consider these 3 evaluation metrics.

For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.

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

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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