The past five years have not been profitable for Lincoln National (NYSE:LNC) investors

To justify the effort of picking individual stocks, it is worth striving to beat the returns from a market index fund. But every investor is sure to have top-performing and underperforming stocks. At this time some shareholders may be doubting their investment Lincoln National Corporation (NYSE:LNC), since the past five years the stock price has fallen by 58%.

It is worth evaluating if the company’s economy has been moving forward with this low shareholder return, or if there is a difference between the two. So let’s do that.

Check out our latest Lincoln National analysis

To quote Buffett, ‘Ships will sail around the world but the Flat Earth Society will thrive. There will continue to be a large gap between price and value in the market…’ One imperfect but easy way to consider how the market perception of a company has changed is to compare the change in earnings per share (EPS) with the stock. price movements.

Over five years, Lincoln National’s earnings per share fell sharply, falling to a loss, while the stock price also fell. Since the company has fallen into a loss-making position, it is difficult to compare changes in EPS with changes in stock price. However, we can say that we expect to see the stock price go down in this situation.

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

It is perhaps worth noting that we have seen significant domestic purchases in the last quarter, which we consider positive. On the other hand, we think revenue and earnings trends are the most meaningful business measures. It may be useful to look at ours free report on Lincoln National’s earnings, revenue and cash flows.

What about Dividends?

When looking at investment returns, it is important to consider the difference between total return to shareholders (TSR) and stock price return. While stock price returns only reflect changes in stock price, TSR includes the value of dividends (assuming they were reinvested) and any capital gains or returns at a discount. Of course, TSR gives a more comprehensive picture of the returns generated by a stock. We note that Lincoln National’s TSR over the past 5 years was -48%, which is better than the stock price return mentioned above. The dividend paid by the company has increased profits total return to shareholders.

A Different View

We are pleased to report that Lincoln National shareholders have achieved a total shareholder return of 41% for the year. That includes dividends. In particular, TSR’s five-year annual loss of 8% per year compares poorly with recent price performance. We generally place more weight on long-term performance in the short-term, but recent improvements may hint at a (positive) inflection point within the business. It’s always interesting to track stock price performance over the long term. But to understand Lincoln National well, we need to consider many other things. Take risk, for example – Lincoln National has 1 warning sign we think you should know.

There are many other companies that have insiders buying stock. You probably do it is not you don’t want to miss this free list of growing companies that insiders are buying.

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

Do you have a comment about this article? Do you care about content? Get in touch with us directly. Alternatively, email the editorial team (at) simplywallst.com.

This Simply Wall St article is general in nature. We provide opinions based only on historical data and analyst forecasts using an unbiased approach and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and it does not take into account your goals, or your financial situation. We aim to bring you deep, long-term analysis driven by primary data. Note that our analysis may not reflect the latest company promotions based on price or quality materials. Simply Wall St has no position in the stocks mentioned.