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Assessing Croda International Plc's (LON:CRDA) 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 CRDA's latest performance announced on 31 December 2018 and evaluate these figures to its historical trend and industry movements.
Did CRDA's recent performance beat its trend and industry?
CRDA's trailing twelve-month earnings (from 31 December 2018) of UK£239m has increased by 0.6% 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 8.5%, indicating the rate at which CRDA is growing has slowed down. What could be happening here? Well, let's examine what's transpiring with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Croda International has invested its equity funds well leading to a 24% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 13% exceeds the GB Chemicals industry of 6.0%, indicating Croda International has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Croda International’s debt level, has declined over the past 3 years from 24% to 20%.
What does this mean?
Though Croda International's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Croda International gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Croda International to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CRDA’s future growth? Take a look at our free research report of analyst consensus for CRDA’s outlook.
- Financial Health: Are CRDA’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.
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.