For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Pathfinder Bancorp Inc’s (NASDAQ:PBHC) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for Pathfinder Bancorp
Did PBHC’s recent earnings growth beat the long-term trend and the industry?
For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method enables me to examine many different companies on a similar basis, using the latest information. For Pathfinder Bancorp, its most recent bottom-line (trailing twelve month) is $3.6M, which, relative to the prior year’s level, has moved up by 17.77%. Since these values may be somewhat myopic, I’ve determined an annualized five-year value for PBHC’s net income, which stands at $2.5M. This shows that, on average, Pathfinder Bancorp has been able to consistently improve its earnings over the last couple of years as well.
What’s enabled this growth? Let’s take a look at if it is merely attributable to industry tailwinds, or if Pathfinder Bancorp has seen some company-specific growth. In the last couple of years, Pathfinder Bancorp grew its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Inspecting growth from a sector-level, the US thrifts and mortgage finance industry has been growing its average earnings by double-digit 11.49% over the past year, and 14.84% over the past five. This means any tailwind the industry is profiting from, Pathfinder Bancorp is capable of leveraging this to its advantage.
What does this mean?
Pathfinder Bancorp’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Pathfinder Bancorp has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Pathfinder Bancorp to get a more holistic view of the stock by looking at:
1. Financial Health: Is PBHC’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.
2. Valuation: What is PBHC worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether PBHC is currently mispriced by the market.
3. 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.