Associated Banc-Corp’s (NYSE:ASB) Earnings Grew 15.45%, Did It Beat Long-Term Trend?
When Associated Banc-Corp (NYSE:ASB) released its most recent earnings update (31 December 2017), 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 Associated Banc-Corp 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 ASB has performed. Check out our latest analysis for Associated Banc-Corp
How Well Did ASB Perform?
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique enables me to examine many different companies on a similar basis, using new information. For Associated Banc-Corp, its latest earnings (trailing twelve month) is US$218.56M, which, relative to last year’s level, has moved up by 15.45%. Given that these figures may be relatively nearsighted, I’ve computed an annualized five-year figure for ASB’s net income, which stands at US$171.98M This means on average, Associated Banc-Corp has been able to increasingly raise its profits over the last couple of years as well.
How has it been able to do this? Well, let’s take a look at if it is solely due to an industry uplift, or if Associated Banc-Corp has experienced some company-specific growth. Over the past few years, Associated Banc-Corp increased its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Viewing growth from a sector-level, the US banks industry has been growing, albeit, at a muted single-digit rate of 3.75% over the prior twelve months, and 8.14% over the past five. This suggests that whatever recent headwind the industry is facing, Associated Banc-Corp is relatively better-cushioned than its peers.
What does this mean?
Though Associated Banc-Corp’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Associated Banc-Corp gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Associated Banc-Corp to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ASB’s future growth? Take a look at our free research report of analyst consensus for ASB’s outlook.
Financial Health: Is ASB’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 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
