Brighthouse Financial (NASDAQ:BHF) shareholders notch a 11% CAGR over 3 years, yet earnings have been shrinking

One simple way to benefit from the stock market is to buy an index fund. But if you pick the right individual stocks, you could make more than that. For example, the Brighthouse Financial, Inc. (NASDAQ:BHF) share price is up 36% in the last three years, clearly besting the market return of around 17% (not including dividends).

Since the stock has added US$132m to its market cap in the past week alone, let’s see if underlying performance has been driving long-term returns.

Check out our latest analysis for Brighthouse Financial

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. 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.

During three years of share price growth, Brighthouse Financial moved from a loss to profitability. So we would expect a higher share price over the period.

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

Brighthouse Financial (NASDAQ:BHF) shareholders notch a 11% CAGR over 3 years, yet earnings have been shrinking
NasdaqGS:BHF Earnings Per Share Growth January 8th 2023

We know that Brighthouse Financial has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

A Different Perspective

Although it hurts that Brighthouse Financial returned a loss of 5.3% in the last twelve months, the broader market was actually worse, returning a loss of 18%. Unfortunately, last year’s performance may indicate unresolved challenges, given that it’s worse than the annualised loss of 3% over the last half decade. Whilst Baron Rothschild does tell the investor “buy when there’s blood in the streets, even if the blood is your own”, buyers would need to examine the data carefully to be comfortable that the business itself is sound. It’s always interesting to track share price performance over the longer term. But to understand Brighthouse Financial better, we need to consider many other factors. Even so, be aware that Brighthouse Financial is showing 2 warning signs in our investment analysis , you should know about…

Of course Brighthouse Financial may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

What are the risks and opportunities for Brighthouse Financial?

Brighthouse Financial, Inc. provides annuity and life insurance products in the United States.

View Full Analysis


  • Trading at 33.9% below our estimate of its fair value

  • Became profitable this year


  • Earnings are forecast to decline by an average of 22.7% per year for the next 3 years

  • Debt is not well covered by operating cash flow

View all Risks and Rewards

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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