Investors in Nexstar Media Group (NASDAQ:NXST) have achieved an exceptional return of 205% over the past five years

Nexstar Media Group, Inc. (NASDAQ: NXST) shareholders might worry after seeing the stock price drop 12% in the last quarter. But that doesn’t change the fact that returns over the past five years have been very strong. It’s fair to say that most would be happy with 175% gain during this time. Generally speaking, long-term returns will give you a better idea of ​​the quality of the business than short-term ones. Ultimately, trade performance will determine whether the stock price continues its positive long-term trend.

So let’s examine and see if the long-term performance of the business has been consistent with the progress of the underlying business.

Check out our latest analysis for Nexstar Media Group

While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying trading performance. An imperfect but reasonable way to gauge changing sentiment around a company is to compare earnings per share (EPS) with the stock price.

In five years of share price growth, Nexstar Media Group has achieved compound earnings per share (EPS) growth of 58% per annum. The EPS growth is more impressive than the annual share price gain of 22% over the same period. So it seems that the market is not so enthusiastic about the title these days. This cautious sentiment is reflected in its (rather low) P/E ratio of 7.50.

The graph below illustrates the evolution of EPS over time (reveal the exact values ​​by clicking on the image).

earnings per share growth

We know that Nexstar Media Group has improved its results over the past three years, but what does the future hold? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive chart.

What about dividends?

In addition to measuring share price performance, investors should also consider total shareholder return (TSR). While the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital raising or spin-offs. off updated. So for companies that pay a generous dividend, the TSR is often much higher than the stock price return. It turns out that Nexstar Media Group’s TSR for the last 5 years was 205%, which exceeds the share price return mentioned earlier. The dividends paid by the company thus inflated the total return to shareholders.

A different perspective

It is good to see that Nexstar Media Group has rewarded its shareholders with a total shareholder return of 8.0% over the past twelve months. Of course, this includes the dividend. That said, the five-year TSR of 25% per year is even better. The pessimistic view would be that the stock has its best days behind it, but on the other hand, the price could simply moderate while the business itself continues to operate. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. For example, we found 3 warning signs for Nexstar Media Group (1 is a little unpleasant!) which you should be aware of before investing here.

If you’re like me, then you not want to miss this free list of growing companies insiders are buying.

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

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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