National Research (NASDAQ:NRC) Has Rewarded Shareholders With An Exceptional 304% Total Return On Their Investment

When you buy a stock there is always a possibility that it could drop 100%. But when you pick a company that is really flourishing, you can make more than 100%. For example, the National Research Corporation (NASDAQ:NRC) share price has soared 271% in the last half decade. Most would be very happy with that. In more good news, the share price has risen 4.9% in thirty days. We note that National Research reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report.

Check out our latest analysis for National Research

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

During five years of share price growth, National Research achieved compound earnings per share (EPS) growth of 16% per year. This EPS growth is lower than the 30% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of National Research's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered National Research's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for National Research shareholders, and that cash payout contributed to why its TSR of 304%, over the last 5 years, is better than the share price return.

A Different Perspective

National Research provided a TSR of 1.2% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 32% a year, over half a decade) look better. Maybe the share price is just taking a breather while the business executes on its growth strategy. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - National Research has 2 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

This article by Simply Wall St is general in nature. 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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