Yahoo Finance Does Smiths Group plc's (LON:SMIN) Recent Track Record Look Strong?
After looking at Smiths Group plc's (LSE:SMIN) latest earnings announcement (31 July 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Smiths Group's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
View our latest analysis for Smiths Group
Did SMIN's recent earnings growth beat the long-term trend and the industry?
SMIN's trailing twelve-month earnings (from 31 July 2019) of UK£140m has jumped 20% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 2.9%, indicating the rate at which SMIN is growing has accelerated. What's enabled this growth? Let's take a look at whether it is solely owing to industry tailwinds, or if Smiths Group has seen some company-specific growth.
In terms of returns from investment, Smiths Group has fallen short of achieving a 20% return on equity (ROE), recording 6.0% instead. However, its return on assets (ROA) of 3.6% exceeds the GB Industrials industry of 2.7%, indicating Smiths Group has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Smiths Group’s debt level, has declined over the past 3 years from 13% to 9.0%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. You should continue to research Smiths Group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for SMIN’s future growth? Take a look at our free research report of analyst consensus for SMIN’s outlook.
Financial Health: Are SMIN’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 July 2019. This may not be consistent with full year annual report figures.
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.
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