Wintrust Financial's 15% CAGR: A Tale of Earnings Growth and Market Perception

Wintrust Financial Corporation (NASDAQ:WTFC) shareholders have earned a 15% compound annual growth rate (CAGR) over the last five years, a testament to the company's strong performance and the market's positive perception of its business. Let's delve into the factors that contributed to this impressive growth and explore how the company's earnings and share price have evolved over time.



Wintrust Financial's 15% CAGR can be attributed to several factors, including strong earnings growth, a shift in market perception, dividend payments, mergers and acquisitions (M&A), and the company's premium finance business.

Firstly, the company achieved a compound earnings per share (EPS) growth of 8.6% per year over the last five years. This steady earnings growth indicates that the company's underlying business has been performing well, with a consistent increase in profitability. Additionally, the market has had a higher opinion of the business than it did five years ago, as evidenced by the share price growth of 12% per year. This suggests that investors have been willing to pay more for the company's shares as they have become more confident in its prospects.

Wintrust Financial has also paid dividends to its shareholders, which have contributed to the total shareholder return (TSR). The TSR over the last five years was 95%, which is better than the share price return alone. This indicates that the dividends have boosted the overall return for shareholders.

Moreover, Wintrust Financial has grown both organically and through modest M&A over the years. This strategy has helped the company expand its reach and diversify its revenue streams, contributing to its overall growth. The company's leading niche premium finance business, a short-tail, low-credit-risk asset class, has also contributed to its attractive intermediate-term growth potential.

In conclusion, Wintrust Financial's 15% CAGR over the last five years is a result of the company's strong earnings growth, a shift in market perception, dividend payments, M&A, and its premium finance business. As the company continues to grow and adapt to the changing market landscape, investors can expect to see further growth in the years to come. However, it is essential to stay informed about the company's performance and the broader market trends to make well-informed investment decisions.