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Highlights
- Schroders (SDR) experienced a 48% share price drop over three years, underperforming the broader market.
- Earnings per share (EPS) declined by 11% annually, exceeding the rate of the share price fall.
- Total shareholder return (TSR) over three years was -40%, reflecting the impact of dividends.
Schroders (LON:SDR), a prominent player among LON financial stocks, has faced a challenging period marked by significant share price erosion. Over the past three years, its shares have fallen 48%, starkly contrasting with the market's 15% gain during the same period. The company’s performance in the last year has also been lackluster, with a 25% decline, compounding a series of underwhelming results.
Examining the company’s fundamentals, Schroders’ earnings per share (EPS) decreased at an annualized rate of 11% over three years. Interestingly, the share price fall of 20% suggests a larger disconnect between market sentiment and the company's earnings trajectory. This underscores a shift in market perception, with broader concerns potentially weighing on its valuation.
Dividends and Total Returns
While share price returns often grab attention, total shareholder return (TSR) provides a fuller perspective by incorporating dividend payouts and other benefits. Schroders’ TSR for the last three years was -40%, slightly better than the share price decline alone. This indicates that dividends played a mitigating role, softening the blow for shareholders during a challenging phase.
Contextualizing Market Performance
Over the past year, Schroders shareholders faced a 21% loss, including dividends, while the broader market advanced by approximately 13%. Over a five-year horizon, the company has delivered an annualized loss of 5%, signaling prolonged underperformance.
Despite market fluctuations and short-term setbacks, broader macroeconomic factors and internal dynamics are pivotal in shaping a company's trajectory. Schroders’ recent challenges emphasize the importance of assessing underlying fundamentals alongside market trends.
Schroders’ continued struggles highlight the complexities of navigating the financial landscape. By monitoring shifts in earnings, market sentiment, and external factors, stakeholders can better understand the dynamics affecting such companies.
