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Jackson Financial's (NYSE:JXN) 189% YoY earnings expansion surpassed the shareholder returns over the past year

The simplest way to invest in stocks is to buy exchange traded funds. But if you pick the right individual stocks, you could make more than that. For example, the Jackson Financial Inc. (NYSE:JXN) share price is up 15% in the last 1 year, clearly besting the market decline of around 19% (not including dividends). So that should have shareholders smiling. We'll need to follow Jackson Financial for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

The past week has proven to be lucrative for Jackson Financial investors, so let's see if fundamentals drove the company's one-year performance.

Check out our latest analysis for Jackson Financial

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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).

Jackson Financial was able to grow EPS by 189% in the last twelve months. This EPS growth is significantly higher than the 15% increase in the share price. So it seems like the market has cooled on Jackson Financial, despite the growth. Interesting. The caution is also evident in the lowish P/E ratio of 0.46.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

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

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free interactive report on Jackson Financial'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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Jackson Financial, it has a TSR of 23% for the last 1 year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Jackson Financial shareholders have gained 23% over the last year, including dividends. A substantial portion of that gain has come in the last three months, with the stock up 21% in that time. This suggests the company is continuing to win over new investors. 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. For instance, we've identified 2 warning signs for Jackson Financial (1 is potentially serious) that you should be aware of.

Jackson Financial is not the only stock that insiders are buying. 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 US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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