Fiserv's (NYSE:FI) investors will be pleased with their favorable 70% return over the last five years
Simply Wall St · 01/29 10:48

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Better yet, you'd like to see the share price move up more than the market average. But Fiserv, Inc. (NYSE:FI) has fallen short of that second goal, with a share price rise of 70% over five years, which is below the market return. On a brighter note, more newer shareholders are probably rather content with the 33% share price gain over twelve months.

Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

See our latest analysis for Fiserv

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During five years of share price growth, Fiserv achieved compound earnings per share (EPS) growth of 7.3% per year. This EPS growth is slower than the share price growth of 11% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. 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).

earnings-per-share-growth
NYSE:FI Earnings Per Share Growth January 29th 2024

We know that Fiserv has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Fiserv's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Fiserv shareholders have received a total shareholder return of 33% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 11% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Fiserv better, we need to consider many other factors. For example, we've discovered 2 warning signs for Fiserv that you should be aware of before investing here.

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 American exchanges.