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Some Hamilton Beach Brands Holding Company (NYSE:HBB) shareholders are probably rather concerned to see the share price fall 45% over the last three months. In contrast the stock is up over the last three years. Arguably you'd have been better off buying an index fund, because the gain of 18% in three years isn't amazing.
So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.
Check out our latest analysis for Hamilton Beach Brands Holding
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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Over the last three years, Hamilton Beach Brands Holding failed to grow earnings per share, which fell 1.8% (annualized).
Given the share price resilience, we don't think the (declining) EPS numbers are a good measure of how the business is moving forward, right now. So other metrics may hold the key to understanding what is influencing investors.
You can only imagine how long term shareholders feel about the declining revenue trend (slipping at 2.1% per year). The only thing that's clear is there is low correlation between Hamilton Beach Brands Holding's share price and its historic fundamental data. Further research may be required!
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Hamilton Beach Brands Holding, it has a TSR of 29% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
Investors in Hamilton Beach Brands Holding had a tough year, with a total loss of 5.2% (including dividends), against a market gain of about 26%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 1.4%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before deciding if you like the current share price, check how Hamilton Beach Brands Holding scores on these 3 valuation metrics.