Yahoo Finance With 17% Earnings Growth, Did IMI plc (LON:IMI) Outperform The Industry?
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Assessing IMI plc's (LON:IMI) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess IMI's recent performance announced on 31 December 2018 and evaluate these figures to its long-term trend and industry movements.
Check out our latest analysis for IMI
How IMI fared against its long-term earnings performance and its industry
IMI's trailing twelve-month earnings (from 31 December 2018) of UK£169m has jumped 17% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -5.8%, indicating the rate at which IMI is growing has accelerated. What's enabled this growth? Well, let’s take a look at whether it is solely because of industry tailwinds, or if IMI has seen some company-specific growth.
In terms of returns from investment, IMI has invested its equity funds well leading to a 25% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 10% exceeds the GB Machinery industry of 7.3%, indicating IMI has used its assets more efficiently. However, its return on capital (ROC), which also accounts for IMI’s debt level, has declined over the past 3 years from 24% to 23%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 46% to 81% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research IMI to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for IMI’s future growth? Take a look at our free research report of analyst consensus for IMI’s outlook.
Financial Health: Are IMI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
