Yahoo Finance How Does Toromont Industries Ltd.'s (TSE:TIH) Earnings Growth Stack Up Against Industry Performance?
Examining Toromont Industries Ltd.'s (TSX:TIH) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess TIH's latest performance announced on 30 June 2019 and weight these figures against its longer term trend and industry movements.
See our latest analysis for Toromont Industries
How Did TIH's Recent Performance Stack Up Against Its Past?
TIH's trailing twelve-month earnings (from 30 June 2019) of CA$270m has jumped 31% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 15%, indicating the rate at which TIH is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is only because of industry tailwinds, or if Toromont Industries has seen some company-specific growth.
In terms of returns from investment, Toromont Industries has fallen short of achieving a 20% return on equity (ROE), recording 20% instead. However, its return on assets (ROA) of 8.6% exceeds the CA Trade Distributors industry of 4.3%, indicating Toromont Industries has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Toromont Industries’s debt level, has declined over the past 3 years from 21% to 17%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 22% to 47% over the past 5 years.
What does this mean?
Though Toromont Industries's past data is helpful, it is only one aspect of my investment thesis. 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 Toromont Industries to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TIH’s future growth? Take a look at our free research report of analyst consensus for TIH’s outlook.
Financial Health: Are TIH’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 2019. 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.
