Yahoo Finance Does Enel SpA’s (BIT:ENEL) Recent Track Record Look Strong?
After looking at Enel SpA’s (BIT:ENEL) latest earnings update (31 March 2018), I found it helpful to revisit the company’s performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings. See our latest analysis for Enel
Commentary On ENEL’s Past Performance
For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine different stocks in a uniform manner using the latest information. For Enel, its latest trailing-twelve-month earnings is €3.97B, which, relative to the prior year’s level, has moved up by a non-trivial 51.68%. Given that these figures are relatively short-term thinking, I’ve created an annualized five-year value for ENEL’s net income, which stands at €2.37B This means that, on average, Enel has been able to steadily raise its net income over the past couple of years as well.
How has it been able to do this? Let’s see whether it is merely due to industry tailwinds, or if Enel has seen some company-specific growth. Though both top-line and bottom-line growth rates in the last few years, were, on average, negative, earnings were more so. While this brought about a margin contraction, it has moderated Enel’s earnings contraction. Viewing growth from a sector-level, the IT electric utilities industry has been growing, albeit, at a unexciting single-digit rate of 9.75% over the prior year, and 4.46% over the last five years. This means that any tailwind the industry is deriving benefit from, Enel is able to leverage this to its advantage.
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 Enel gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Enel to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ENEL’s future growth? Take a look at our free research report of analyst consensus for ENEL’s outlook.
Financial Health: Is ENEL’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 pass 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.
