For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Core-Mark Holding Company, Inc. (NasdaqGS:CORE) useful as an attempt to give more color around how Core-Mark Holding Company is currently performing.
How Well Did CORE Perform?
CORE's trailing twelve-month earnings (from 31 December 2019) of US$58m has jumped 27% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 0.05%, indicating the rate at which CORE is growing has accelerated. What's the driver of this growth? Let's take a look at if it is only because of industry tailwinds, or if Core-Mark Holding Company has experienced some company-specific growth.
In terms of returns from investment, Core-Mark Holding Company has fallen short of achieving a 20% return on equity (ROE), recording 9.7% instead. Furthermore, its return on assets (ROA) of 3.8% is below the US Retail Distributors industry of 6.8%, indicating Core-Mark Holding Company's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Core-Mark Holding Company’s debt level, has declined over the past 3 years from 9.6% to 7.6%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 18% to 59% over the past 5 years.
What does this mean?
Core-Mark Holding Company'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 Core-Mark Holding Company gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Core-Mark Holding Company to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CORE’s future growth? Take a look at our free research report of analyst consensus for CORE’s outlook.
- Financial Health: Are CORE’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 December 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 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.
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