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Understanding how Chase Corporation (NYSEMKT:CCF) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Chase is doing by comparing its latest earnings with its long-term trend as well as the performance of its chemicals industry peers.
Was CCF's weak performance lately a part of a long-term decline?
CCF's trailing twelve-month earnings (from 28 February 2019) of US$38m has declined by -6.8% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 14%, indicating the rate at which CCF is growing has slowed down. Why could this be happening? Let's examine what's going on with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, Chase has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 13% exceeds the US Chemicals industry of 7.1%, indicating Chase has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Chase’s debt level, has declined over the past 3 years from 21% to 19%.
What does this mean?
Chase's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Chase to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CCF’s future growth? Take a look at our free research report of analyst consensus for CCF’s outlook.
- Financial Health: Are CCF’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 28 February 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 firstname.lastname@example.org. 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.