Yahoo Finance Does Intertek Group plc’s (LON:ITRK) Recent Track Record Look Strong?
For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Intertek Group plc’s (LON:ITRK) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Check out our latest analysis for Intertek Group
Were ITRK’s earnings stronger than its past performances and the industry?
ITRK’s trailing twelve-month earnings (from 30 June 2018) of UK£290m has increased by 5.1% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 5.5%, indicating the rate at which ITRK is growing has slowed down. To understand what’s happening, let’s examine what’s transpiring with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Intertek Group has invested its equity funds well leading to a 38% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 15% exceeds the GB Professional Services industry of 9.4%, indicating Intertek Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Intertek Group’s debt level, has increased over the past 3 years from 19% to 28%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 109% to 91% over the past 5 years.
What does this mean?
Though Intertek Group’s past data is helpful, it is only one aspect of my investment thesis. While Intertek Group has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Intertek Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ITRK’s future growth? Take a look at our free research report of analyst consensus for ITRK’s outlook.
Financial Health: Are ITRK’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 30 June 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 editorial-team@simplywallst.com.
