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Measuring Meritage Homes Corporation's (NYSE:MTH) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess MTH's recent performance announced on 31 March 2019 and compare these figures to its historical trend and industry movements.
How MTH fared against its long-term earnings performance and its industry
MTH's trailing twelve-month earnings (from 31 March 2019) of US$209m has jumped 28% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 8.8%, indicating the rate at which MTH is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is merely owing to industry tailwinds, or if Meritage Homes has experienced some company-specific growth.
In terms of returns from investment, Meritage Homes has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 6.3% is below the US Consumer Durables industry of 7.0%, indicating Meritage Homes's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Meritage Homes’s debt level, has declined over the past 3 years from 9.0% to 8.8%.
What does this mean?
Meritage Homes's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Meritage Homes has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Meritage Homes to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MTH’s future growth? Take a look at our free research report of analyst consensus for MTH’s outlook.
- Financial Health: Are MTH’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 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 firstname.lastname@example.org. 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.