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Examining Danaher Corporation's (NYSE:DHR) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess DHR's latest performance announced on 29 March 2019 and compare these figures to its longer term trend and industry movements.
How Did DHR's Recent Performance Stack Up Against Its Past?
DHR's trailing twelve-month earnings (from 29 March 2019) of US$2.4b has declined by -5.5% 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 2.8%, indicating the rate at which DHR is growing has slowed down. What could be happening here? 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, Danaher has fallen short of achieving a 20% return on equity (ROE), recording 7.7% instead. Furthermore, its return on assets (ROA) of 4.9% is below the US Medical Equipment industry of 6.8%, indicating Danaher's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Danaher’s debt level, has increased over the past 3 years from 5.1% to 7.5%.
What does this mean?
Though Danaher's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I recommend you continue to research Danaher to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for DHR’s future growth? Take a look at our free research report of analyst consensus for DHR’s outlook.
- Financial Health: Are DHR’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 29 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.