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With 12% Earnings Growth, Did Hannover Rück SE (FRA:HNR1) Outperform The Industry?

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When Hannover Rück SE (FRA:HNR1) announced its most recent earnings (31 March 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Hannover Rück has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see HNR1 has performed.

Check out our latest analysis for Hannover Rück

Could HNR1 beat the long-term trend and outperform its industry?

HNR1's trailing twelve-month earnings (from 31 March 2019) of €1.1b has jumped 12% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 1.6%, indicating the rate at which HNR1 is growing has accelerated. What's enabled this growth? Let's see whether it is merely a result of industry tailwinds, or if Hannover Rück has experienced some company-specific growth.

DB:HNR1 Income Statement, June 29th 2019
DB:HNR1 Income Statement, June 29th 2019

In terms of returns from investment, Hannover Rück has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 1.9% exceeds the DE Insurance industry of 0.9%, indicating Hannover Rück has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Hannover Rück’s debt level, has declined over the past 3 years from 3.0% to 2.8%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While Hannover Rück has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Hannover Rück to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for HNR1’s future growth? Take a look at our free research report of analyst consensus for HNR1’s outlook.

  2. Financial Health: Are HNR1’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.

  3. 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 March 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.