Yahoo Finance Has Tate & Lyle plc (LON:TATE) Improved Earnings Growth In Recent Times?
Assessing Tate & Lyle plc's (LSE:TATE) performance as a company requires looking at more than just a years' earnings data. Below, I will run you through a simple sense check to build perspective on how Tate & Lyle is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its food industry peers.
Check out our latest analysis for Tate & Lyle
How Well Did TATE Perform?
TATE's trailing twelve-month earnings (from 30 September 2019) of UK£231m has increased by 5.0% 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 24%, indicating the rate at which TATE is growing has slowed down. To understand what's happening, let’s take a look at what’s occurring with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, Tate & Lyle has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 9.1% exceeds the GB Food industry of 5.2%, indicating Tate & Lyle has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Tate & Lyle’s debt level, has increased over the past 3 years from 9.7% to 14%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 74% to 44% over the past 5 years.
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 Tate & Lyle gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Tate & Lyle to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TATE’s future growth? Take a look at our free research report of analyst consensus for TATE’s outlook.
Financial Health: Are TATE’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 September 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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