When Assicurazioni Generali S.p.A. (BIT:G) announced its most recent earnings (30 June 2019), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Assicurazioni Generali performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see G has performed.
Commentary On G's Past Performance
G's trailing twelve-month earnings (from 30 June 2019) of €2.2b has increased by 0.2% 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 5.8%, indicating the rate at which G is growing has slowed down. To understand what's happening, let's examine what's going on with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, Assicurazioni Generali has fallen short of achieving a 20% return on equity (ROE), recording 8.6% instead. Furthermore, its return on assets (ROA) of 0.6% is below the IT Insurance industry of 0.8%, indicating Assicurazioni Generali's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Assicurazioni Generali’s debt level, has increased over the past 3 years from 0.8% to 1.0%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 95% to 77% over the past 5 years.
What does this mean?
Assicurazioni Generali's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Assicurazioni Generali 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 Assicurazioni Generali to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for G’s future growth? Take a look at our free research report of analyst consensus for G’s outlook.
- Financial Health: Are G’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.
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