Assessing CRH plc's (ISE:CRG) 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 CRG's latest performance announced on 31 December 2018 and evaluate these figures to its historical trend and industry movements.
How Did CRG's Recent Performance Stack Up Against Its Past?
CRG's trailing twelve-month earnings (from 31 December 2018) of €1.4b has declined by -20% 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 43%, indicating the rate at which CRG is growing has slowed down. Why is this? Let's examine what's transpiring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, CRH has fallen short of achieving a 20% return on equity (ROE), recording 8.7% instead. Furthermore, its return on assets (ROA) of 5.0% is below the IE Basic Materials industry of 6.1%, indicating CRH's are utilized less efficiently. However, its return on capital (ROC), which also accounts for CRH’s debt level, has increased over the past 3 years from 4.6% to 7.6%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 58% to 57% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. I suggest you continue to research CRH to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CRG’s future growth? Take a look at our free research report of analyst consensus for CRG’s outlook.
- Financial Health: Are CRG’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 2018. This may not be consistent with full year annual report figures.
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