How Does Brunswick Corporation’s (NYSE:BC) EPS Growth Stack Up Against Industry Performance?
Today I will examine Brunswick Corporation’s (NYSE:BC) latest earnings update (30 September 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of BC’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. Check out our latest analysis for Brunswick
Did BC beat its long-term earnings growth trend and its industry?
I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to assess different stocks on a more comparable basis, using the latest information. Brunswick’s latest earnings is $281.1M, which, against last year’s level, has climbed up by 13.60%. Since these figures are fairly nearsighted, I have estimated an annualized five-year figure for BC’s earnings, which stands at $245.7M. This shows that, on average, Brunswick has been able to increasingly raise its bottom line over the last few years as well.
How has it been able to do this? Well, let’s take a look at whether it is solely due to industry tailwinds, or if Brunswick has experienced some company-specific growth. In the past few years, Brunswick expanded its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Viewing growth from a sector-level, the US leisure industry has been enduring some headwinds over the previous year, leading to an average earnings drop of -6.42%. This is a momentous change, given that the industry has constantly been delivering a a strong growth of 11.70% in the past couple of years. This suggests that whatever recent headwind the industry is facing, Brunswick is less exposed compared to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Brunswick has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Brunswick to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BC’s future growth? Take a look at our free research report of analyst consensus for BC’s outlook.
2. Financial Health: Is BC’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.
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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
