Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Today I will take a look at Chubb Limited's (NYSE:CB) most recent earnings update (31 March 2019) and compare these latest figures against its performance over the past few years, as well as how the rest of the insurance industry performed. As an investor, I find it beneficial to assess CB’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
How Did CB's Recent Performance Stack Up Against Its Past?
CB's trailing twelve-month earnings (from 31 March 2019) of US$3.9b has increased by 1.8% 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 8.6%, indicating the rate at which CB is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and if the whole industry is feeling the heat.
In terms of returns from investment, Chubb has fallen short of achieving a 20% return on equity (ROE), recording 7.5% instead. However, its return on assets (ROA) of 2.7% exceeds the US Insurance industry of 2.6%, indicating Chubb has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Chubb’s debt level, has increased over the past 3 years from 5.2% to 6.3%.
What does this mean?
Though Chubb'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 suggest you continue to research Chubb to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CB’s future growth? Take a look at our free research report of analyst consensus for CB’s outlook.
- Financial Health: Are CB’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 March 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 email@example.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. Thank you for reading.