New York Community Bancorp’s earnings declined over five years, contributing to the loss of 5.1% of shareholders

New York City Bancorp, Inc. (NYSE:NYCB) shareholders should be pleased that the stock price is up 11% over the most recent quarter. But that doesn’t change the fact that returns over the past five years have been anything but encouraging. In fact, the stock price is down 31%, which falls far short of the return you could get from buying an index fund.

More encouragingly, the company increased its market cap by $334 million in the last 7 days. Let’s see if we can figure out what caused the five-year loss to shareholders.

Check out our latest analysis for New York Community Bancorp

To quote Buffett, “Ships will sail around the world, but the Flat Earth Society will thrive. There will continue to be wide discrepancies between price and value in the market…” By comparing earnings per share (EPS) and share price changes over time, we can get a sense of how investor attitudes towards a company are changing has changed over time.

During the five years that the stock price declined, New York Community Bancorp’s earnings per share (EPS) declined 0.2% each year. Readers should note that the stock price fell faster than its earnings per share at a rate of 7% per year during the period. This implies that the market is more cautious about the business these days. The low P/E ratio of 11.22 further reflects this caution.

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

Earnings per share growth
NYSE: NYCB earnings growth per share Jan 16, 2023

We like that insiders have bought stocks over the past 12 months. However, most people consider the earnings and revenue growth trends to be a more meaningful guide for the company. Dig deeper into earnings by checking out this interactive chart of New York Community Bancorp’s earnings, earnings, and cash flows.

What about dividends?

In addition to the return on the share price, investors should also consider the total shareholder return (TSR). The TSR takes into account the value of any demerger or discounted capital increase along with any dividends based on the assumption that the dividends will be reinvested. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of New York Community Bancorp, it has a TSR of -5.1% over the last 5 years. That exceeds the previously mentioned stock price return. This is mainly due to the dividend payments!

A different perspective

While the broader market fell about 15% over the 12 months, New York Community Bancorp shareholders fared even worse, losing 22% (even including dividends). However, it could simply be that the stock price has been affected by broader market swings. It might be worth keeping an eye on the fundamentals should a good opportunity present itself. Unfortunately, last year’s performance may point to unresolved challenges, as it was worse than the 1.0% annualized loss over the last half decade. In general, long-term price weakness can be a bad sign, although contrarian investors might want to scrutinize the stock in hopes of a turnaround. It is always interesting to follow stock price developments over the longer term. But to better understand New York Community Bancorp, we need to consider many other factors. For example, consider the ever-present specter of investment risk. We have identified 3 warning signs with New York Community Bancorp and understanding them should be part of your investment process.

New York Community Bancorp isn’t the only stock insider buying stocks. So take a look for free List of Growing Insider Buying Companies.

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

The assessment is complex, but we help to simplify it.

find out if New York Community Bancorp may be over or under priced by reviewing our comprehensive analysis which includes the following Fair Value Estimates, Risks and Warnings, Dividends, Insider Trading and Financial Health.

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This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.