Has Chr. Hansen Holding A/S (CPH:CHR) Improved Earnings Growth In Recent Times?
Assessing Chr. Hansen Holding A/S's (CPSE:CHR) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess CHR's latest performance announced on 30 November 2019 and evaluate these figures to its historical trend and industry movements.
View our latest analysis for Chr. Hansen Holding
How CHR fared against its long-term earnings performance and its industry
CHR's trailing twelve-month earnings (from 30 November 2019) of €249m has increased by 7.0% 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 12%, indicating the rate at which CHR is growing has slowed down. Why could this be happening? Well, let's examine what's transpiring with margins and if the whole industry is experiencing the hit as well.
In terms of returns from investment, Chr. Hansen Holding has invested its equity funds well leading to a 34% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 12% exceeds the DK Chemicals industry of 5.6%, indicating Chr. Hansen Holding has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Chr. Hansen Holding’s debt level, has increased over the past 3 years from 20% to 21%.
What does this mean?
Chr. Hansen Holding's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Chr. Hansen Holding gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Chr. Hansen Holding to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for CHR’s future growth? Take a look at our free research report of analyst consensus for CHR’s outlook.
Financial Health: Are CHR’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 November 2019. This may not be consistent with full year annual report figures.
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.
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