Examining Century Bancorp Inc’s (NASDAQ:CNBK.A) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess CNBK.A’s latest performance announced on 30 September 2017 and weigh these figures against its longer term trend and industry movements. See our latest analysis for CNBK.A
Commentary On CNBK.A’s Past Performance
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to examine many different companies on a similar basis, using new information. Century Bancorp’s latest twelve-month earnings is $29M, which compared to the previous year’s level, has climbed up by 19.88%. Since these values may be relatively short-term, I have estimated an annualized five-year figure for CNBK.A’s net income, which stands at $21M. This suggests that, on average, Century Bancorp has been able to steadily improve its profits over the last few years as well.
What’s the driver of this growth? Well, let’s take a look at if it is only because of an industry uplift, or if Century Bancorp has experienced some company-specific growth. Over the last couple of years, Century Bancorp expanded its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the US banks industry has been growing its average earnings by double-digit 12.54% over the past year, and a more muted 9.71% over the previous five years. This shows that any tailwind the industry is gaining from, Century Bancorp is capable of leveraging this to its advantage.
What does this mean?
Though Century Bancorp’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Century Bancorp to get a more holistic view of the stock by looking at:
1. Financial Health: Is CNBK.A’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 CNBK.A 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 CNBK.A 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.