Examining BCE Inc.'s (TSE:BCE) 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 BCE's latest performance announced on 30 June 2019 and compare these figures to its longer term trend and industry movements.
How Well Did BCE Perform?
BCE's trailing twelve-month earnings (from 30 June 2019) of CA$2.9b has increased by 3.4% 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 5.1%, indicating the rate at which BCE is growing has slowed down. Why could this be happening? Well, let's look at what's going on with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, BCE has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 6.6% exceeds the CA Telecom industry of 5.3%, indicating BCE has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for BCE’s debt level, has declined over the past 3 years from 13% to 11%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 106% to 125% over the past 5 years.
What does this mean?
BCE's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While BCE 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 BCE to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for BCE’s future growth? Take a look at our free research report of analyst consensus for BCE’s outlook.
- Financial Health: Are BCE’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 email@example.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.