When Daejan Holdings Plc (LON:DJAN) released its most recent earnings update (31 March 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Daejan Holdings performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see DJAN has performed.
Did DJAN’s recent earnings growth beat the long-term trend and the industry?
DJAN’s trailing twelve-month earnings (from 31 March 2018) of UK£203m has jumped 25% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.2%, indicating the rate at which DJAN is growing has accelerated. How has it been able to do this? Let’s see whether it is merely because of an industry uplift, or if Daejan Holdings has seen some company-specific growth.
In terms of returns from investment, Daejan Holdings has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 8.5% exceeds the GB Real Estate industry of 7.6%, indicating Daejan Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Daejan Holdings’s debt level, has declined over the past 3 years from 2.5% to 2.2%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Daejan Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Daejan Holdings to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for DJAN’s future growth? Take a look at our free research report of analyst consensus for DJAN’s outlook.
- Financial Health: Are DJAN’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 March 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.