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With 4.9% Earnings Growth, Did The York Water Company (NASDAQ:YORW) Outperform The Industry?

Simply Wall St

Examining how The York Water Company (NASDAQ:YORW) is performing as a company requires looking at more than just a years' earnings. Below, I will run you through a simple sense check to build perspective on how York Water is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its water utilities industry peers.

Check out our latest analysis for York Water

How YORW fared against its long-term earnings performance and its industry

YORW's trailing twelve-month earnings (from 30 June 2019) of US$14m has increased by 4.9% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.3%, indicating the rate at which YORW is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is solely because of industry tailwinds, or if York Water has seen some company-specific growth.

NasdaqGS:YORW Income Statement, September 24th 2019
NasdaqGS:YORW Income Statement, September 24th 2019

In terms of returns from investment, York Water has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 5.5% exceeds the US Water Utilities industry of 3.6%, indicating York Water has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for York Water’s debt level, has declined over the past 3 years from 7.4% to 6.5%.

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 York Water to get a better picture of the stock by looking at:

  1. Financial Health: Are YORW’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.

  2. Valuation: What is YORW 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 YORW is currently mispriced by the market.

  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 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 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.