Yahoo Finance Some Münchener Rückversicherungs-Gesellschaft (ETR:MUV2) Shareholders Are Down 12%
Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft (ETR:MUV2) shareholders should be happy to see the share price up 25% in the last month. In contrast, the stock is down for the year. But at least it bettered the loss of 12% in its market.
See our latest analysis for Münchener Rückversicherungs-Gesellschaft
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the unfortunate twelve months during which the Münchener Rückversicherungs-Gesellschaft share price fell, it actually saw its earnings per share (EPS) improve by 22%. Of course, the situation might betray previous over-optimism about growth.
The divergence between the EPS and the share price is quite notable, during the year. So it's easy to justify a look at some other metrics.
We don't see any weakness in the Münchener Rückversicherungs-Gesellschaft's dividend so the steady payout can't really explain the share price drop. From what we can see, revenue is pretty flat, so that doesn't really explain the share price drop. Of course, it could simply be that it simply fell short of the market consensus expectations.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Münchener Rückversicherungs-Gesellschaft is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So it makes a lot of sense to check out what analysts think Münchener Rückversicherungs-Gesellschaft will earn in the future (free analyst consensus estimates)
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. As it happens, Münchener Rückversicherungs-Gesellschaft's TSR for the last year was -7.9%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
While it's certainly disappointing to see that Münchener Rückversicherungs-Gesellschaft shares lost 7.9% throughout the year, that wasn't as bad as the market loss of 12%. Longer term investors wouldn't be so upset, since they would have made 5.2%, each year, over five years. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. It's always interesting to track share price performance over the longer term. But to understand Münchener Rückversicherungs-Gesellschaft better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Münchener Rückversicherungs-Gesellschaft you should be aware of.
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DE exchanges.
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.
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. Thank you for reading.
