Investors one-year returns in Prudential (LON:PRU) have not grown faster than the company’s underlying earnings growth

Simply Wall St

Thu, February 12, 2026 at 4:58 PM GMT+9 3 min read

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PUK

-0.90%

PUKPF

+5.22%

PRU

+1.87%

The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. For example, the Prudential plc (LON:PRU) share price is up 61% in the last 1 year, clearly besting the market return of around 20% (not including dividends). That’s a solid performance by our standards! On the other hand, longer term shareholders have had a tougher run, with the stock falling 11% in three years.

While the stock has fallen 4.4% this week, it’s worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

We’ve found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Prudential was able to grow EPS by 307% in the last twelve months. This EPS growth is significantly higher than the 61% increase in the share price. Therefore, it seems the market isn’t as excited about Prudential as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 11.61.

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

LSE:PRU Earnings Per Share Growth February 12th 2026

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here…

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Prudential the TSR over the last 1 year was 64%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It’s good to see that Prudential has rewarded shareholders with a total shareholder return of 64% in the last twelve months. And that does include the dividend. There’s no doubt those recent returns are much better than the TSR loss of 1.4% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Prudential by clicking this link.

Story Continues  

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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

Have feedback on this article? Concerned about the content? Get in touch** with us directly.**_ Alternatively, email editorial-team (at) simplywallst.com._

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.

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