Did Brambles Limited's (ASX:BXB) Recent Earnings Growth Beat The Trend?
Examining how Brambles Limited (ASX:BXB) is performing as a company requires looking at more than just a years' earnings. Below, I will run you through a simple sense check to build perspective on how Brambles is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its commercial services industry peers.
View our latest analysis for Brambles
How BXB fared against its long-term earnings performance and its industry
BXB's trailing twelve-month earnings (from 31 December 2019) of US$465m has jumped 22% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -5.7%, indicating the rate at which BXB is growing has accelerated. What's enabled this growth? Well, let’s take a look at whether it is merely owing to industry tailwinds, or if Brambles has experienced some company-specific growth.
In terms of returns from investment, Brambles has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 7.4% exceeds the AU Commercial Services industry of 7.3%, indicating Brambles has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Brambles’s debt level, has declined over the past 3 years from 17% to 16%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. I suggest you continue to research Brambles to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BXB’s future growth? Take a look at our free research report of analyst consensus for BXB’s outlook.
Financial Health: Are BXB’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 editorial-team@simplywallst.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.
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