Has DCC plc (LON:DCC) Improved Earnings Growth In Recent Times?
Measuring DCC plc’s (LSE:DCC) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess DCC’s recent performance announced on 30 September 2017 and weigh these figures against its long-term trend and industry movements. Check out our latest analysis for DCC
Commentary On DCC’s Past Performance
I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to analyze different companies on a similar basis, using new information. For DCC, its most recent bottom-line (trailing twelve month) is UK£202.34M, which compared to the prior year’s level, has jumped up by 10.93%. Since these values may be relatively nearsighted, I have calculated an annualized five-year value for DCC’s earnings, which stands at UK£132.85M This suggests that, on average, DCC has been able to steadily raise its profits over the last couple of years as well.
What’s the driver of this growth? Let’s see whether it is only a result of an industry uplift, or if DCC has seen some company-specific growth. In the past couple of years, DCC expanded its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Looking at growth from a sector-level, the UK industrials industry has been growing, albeit, at a subdued single-digit rate of 8.52% in the prior year, and 3.03% over the past half a decade. This suggests that whatever tailwind the industry is enjoying, DCC is able to leverage this to its advantage.
What does this mean?
Though DCC’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 DCC to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for DCC’s future growth? Take a look at our free research report of analyst consensus for DCC’s outlook.
Financial Health: Is DCC’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 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
