Charles Schwab (NYSE:SCHW) shareholders have seen an average annual growth rate of 11% over the past five years, while earnings are still declining

While The Charles Schwab Corporation (NYSE:SCHW) shareholders are probably generally happy because the stock hasn't performed particularly well recently, falling 11% in the last quarter. But at least the stock has risen over the past five years. During that time, it's up 58%, which isn't bad, but it's below the market return of 107%.

With it being a strong week for Charles Schwab shareholders, let's take a look at how the longer-term fundamentals are performing.

Check out our latest analysis on Charles Schwab

There's no denying that markets are sometimes efficient, but prices don't always reflect underlying company performance. By comparing earnings per share (EPS) and share price changes over time, we can get a sense of how investor attitudes toward a company have changed over time.

During the five years of sustained share price growth, Charles Schwab recorded an annual decline in earnings per share of 2.1%.

So it's hard to argue that earnings per share is the best metric to judge the company as it may not be optimized for profits at the moment, so it's worth looking at other metrics to understand share price movements.

We doubt that the modest 1.5% dividend yield will attract many buyers to the stock. In contrast, revenue growth of 15% per year is likely to be seen as evidence that Charles Schwab is growing, which is a real positive. In this case, the company may be sacrificing current earnings per share to drive growth.

You can see below how earnings and sales have developed over time (you can find out the exact values ​​by clicking on the image).

It's probably worth noting that we saw significant insider buying in the last quarter, which we view as a positive. However, we think the earnings and revenue growth trends are even more important factors to consider, so we recommend checking out free Report with consensus forecasts

What about dividends?

In addition to measuring share price return, investors should also consider total shareholder return (TSR). TSR takes into account the value of any spin-offs or discounted capital raisings, as well as any dividends, based on the assumption that the dividends are reinvested. It's fair to say that TSR provides a more complete picture for dividend-paying stocks. In the case of Charles Schwab, the TSR is 70% over the last 5 years. That beats the share price return we mentioned earlier. This is largely due to dividend payments!

A different perspective

Charles Schwab shareholders are up 20% for the year (even including dividends). However, that was less than the market average. On the positive side, the gain was actually better than the average annual return of 11% per year over five years. It's possible that returns will improve along with business fundamentals. Investors who like to make money usually look at insider purchases, such as the price paid and the total purchase amount. You can read about Charles Schwab's insider purchases by clicking this link.

The story continues

Charles Schwab is not the only stock that insiders are buying. For those who like to find lesser-known companies The free A list of growing companies with recent insider purchases might be just the thing.

Please note that the market returns quoted in this article reflect the market weighted average returns of stocks currently trading on U.S. exchanges.

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