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Shareholders Have Faith in Loss-making Brighthouse Financial (NASDAQ:BHF) as Stock Climbs 3.8% in Past Week, Taking Three-year Gain to 48%

Simply Wall St ·  Nov 28, 2023 09:04

By buying an index fund, you can roughly match the market return with ease. But many of us dare to dream of bigger returns, and build a portfolio ourselves. For example, the Brighthouse Financial, Inc. (NASDAQ:BHF) share price is up 48% in the last three years, clearly besting the market return of around 14% (not including dividends).

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

Check out our latest analysis for Brighthouse Financial

Because Brighthouse Financial made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last three years Brighthouse Financial has grown its revenue at 2.5% annually. That's not a very high growth rate considering it doesn't make profits. In that time the share price is up 14% per year, which is not unreasonable given the revenue growth. The real question is when the business will generate profits, and how quickly they will grow. Given the market doesn't seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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NasdaqGS:BHF Earnings and Revenue Growth November 28th 2023

This free interactive report on Brighthouse Financial's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Investors in Brighthouse Financial had a tough year, with a total loss of 3.7%, against a market gain of about 16%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 5% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

If you are like me, then you will not want to miss this free list of growing 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 American 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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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