Yahoo Finance Should You Be Happy With James Halstead plc's (LON:JHD) 3.0% Earnings Growth?
Assessing James Halstead plc's (AIM:JHD) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess JHD's recent performance announced on 30 June 2019 and evaluate these figures to its long-term trend and industry movements.
View our latest analysis for James Halstead
Did JHD's recent earnings growth beat the long-term trend and the industry?
JHD's trailing twelve-month earnings (from 30 June 2019) of UK£38m has increased by 3.0% 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 3.3%, indicating the rate at which JHD is growing has slowed down. To understand what's happening, let’s take a look at what’s occurring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, James Halstead has invested its equity funds well leading to a 28% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 17% exceeds the GB Building industry of 6.1%, indicating James Halstead has used its assets more efficiently. However, its return on capital (ROC), which also accounts for James Halstead’s debt level, has declined over the past 3 years from 37% to 31%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. 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 James Halstead to get a more holistic view of the stock by looking at:
Financial Health: Are JHD’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.
Valuation: What is JHD worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether JHD is currently mispriced by the market.
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.
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.
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. Thank you for reading.
