Despite BankUnited’s (NYSE:BKU) earnings trending downward, the stock price has risen 15%, resulting in a one-year gain of 38%.

Passive investing in index funds can generate returns roughly equivalent to the overall market, but investors can increase their returns by holding shares in select companies that outperform the market. Bank United Co., Ltd. (NYSE:BKU) shares are 32% higher than they were a year ago, far better than the market return (excluding dividends) of about 21% over the same period. If this strong performance can be sustained over the long term, investors will be in for a treat! Meanwhile, shares are 12% lower than they were three years ago, making the long-term return negative.

It’s been a good week for BankUnited shareholders, so let’s take a look at the longer term fundamentals.

Check out our latest analysis for BankUnited

While there’s no denying that markets are sometimes efficient, share prices don’t always reflect underlying business performance. Comparing earnings per share (EPS) and share price trends can provide a view into how investor attitudes to a company have changed over time.

Indeed, BankUnited’s earnings per share fell 33% over the last year.

Therefore, it is believed that investors are not paying much attention to EPS, and therefore, it is likely that investors are placing more importance on other metrics at the moment.

BankUnited’s revenue actually fell 5.4% over the last year, so fundamental metrics don’t provide a clear explanation for the stock price rise.

The image below shows how earnings and revenue have changed over time (if you click on the image you can see greater detail).

BankUnited is a well-known stock, with plenty of analyst coverage and good prospects for future growth, so it makes sense to check out what analysts are forecasting for BankUnited’s future earnings (free analyst consensus forecasts)

What about dividends?

It is important to consider the total shareholder return, as well as the price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, as well as dividends, based on the assumption that the dividends are reinvested. This gives a more comprehensive picture of the return generated by a stock. In the case of BankUnited, we can see that the TSR for the past year was 38%, which is higher than the price return shown above. This is mainly due to the dividend payments.

A different perspective

We’re pleased to report that BankUnited shareholders have received a total shareholder return of 38% over the past one year. This includes dividends. The share price performance appears to have improved recently, as the one-year TSR is better than the five-year TSR (the latter of which is 3% per year). An optimistic person might view the recent improvement in TSR as an indication that the business itself is getting better over time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to gain true insight, other information needs to be considered as well. For example, we have identified: 1 warning sign for BankUnited Something you should know.

If you want to check out another company that may be financially superior, don’t miss this one. free A list of companies that have proven they can grow revenue.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. We use only unbiased methodologies to provide commentary based on historical data and analyst forecasts, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks, and does not take into account your objectives, or your financial situation. We seek to provide long-term focused analysis driven by 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.

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