Earnings grew faster than the favorable 89% return delivered to Coterra Energy (NYSE:CTRA) shareholders over the last year




  • In Business
  • 2022-06-19 14:22:32Z
  • By Simply Wall St.
 

The Coterra Energy Inc. (NYSE:CTRA) share price has had a bad week, falling 23%. But that doesn't change the reality that over twelve months the stock has done really well. To wit, it had solidly beat the market, up 73%.

Since the long term performance has been good but there's been a recent pullback of 23%, let's check if the fundamentals match the share price.

See our latest analysis for Coterra Energy

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 last year Coterra Energy grew its earnings per share (EPS) by 294%. It's fair to say that the share price gain of 73% did not keep pace with the EPS growth. So it seems like the market has cooled on Coterra Energy, despite the growth. Interesting.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Coterra Energy's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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 Coterra Energy, it has a TSR of 89% 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 good to see that Coterra Energy has rewarded shareholders with a total shareholder return of 89% in the last twelve months. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 5% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Coterra Energy better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with Coterra Energy (including 2 which make us uncomfortable) .

Coterra Energy 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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