Sterling Bancorp (Southfield MI)'s (NASDAQ:SBT) investors will be pleased with their respectable 50% return over the last year

Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Sterling Bancorp, Inc. (Southfield, MI) (NASDAQ:SBT) share price is 50% higher than it was a year ago, much better than the market decline of around 8.1% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! On the other hand, longer term shareholders have had a tougher run, with the stock falling 33% in three years.

So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.

View our latest analysis for Sterling Bancorp (Southfield MI)

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 the last year Sterling Bancorp (Southfield MI) grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

However the year on year revenue growth of 51% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

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

earnings-and-revenue-growth

We know that Sterling Bancorp (Southfield MI) has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Sterling Bancorp (Southfield MI) in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that Sterling Bancorp (Southfield MI) rewarded shareholders with a total shareholder return of 50% over the last year. What is absolutely clear is that is far preferable to the dismal 10% average annual loss suffered over the last three years. It could well be that the business has turned around -- or else regained the confidence of investors. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Sterling Bancorp (Southfield MI) you should know about.

But note: Sterling Bancorp (Southfield MI) may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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 provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.