When C R Bard Inc (NYSE:BCR) released its most recent earnings update (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well C. R. Bard has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see BCR has performed. View our latest analysis for C. R. Bard
How BCR fared against its long-term earnings performance and its industry
I look at the ‘latest twelve-month’ data, 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 blend enables me to analyze various companies on a similar basis, using the latest information. For C. R. Bard, the most recent twelve-month earnings is $568.5M, which compared to the prior year’s figure, has moved up by 12.71%. Given that these values may be fairly short-term, I have calculated an annualized five-year figure for C. R. Bard’s earnings, which stands at $431.1M. This suggests that, on average, C. R. Bard has been able to consistently raise its net income over the last couple of years as well.
How has it been able to do this? Well, let’s take a look at whether it is merely because of an industry uplift, or if C. R. Bard has seen some company-specific growth. The hike in earnings seems to be driven by a substantial top-line increase beating its growth rate of expenses. Though this has led to a margin contraction, it has made C. R. Bard more profitable. Viewing growth from a sector-level, the US healthcare equipment and supplies industry has been growing its average earnings by double-digit 18.95% in the past twelve months, and a more muted 8.90% over the previous five years. This shows that any tailwind the industry is benefiting from, C. R. Bard has not been able to realize the gains unlike its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research C. R. Bard to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BCR’s future growth? Take a look at our free research report of analyst consensus for BCR’s outlook.
2. Financial Health: Is BCR’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.