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How Does Carlisle Companies Incorporated's (NYSE:CSL) Earnings Growth Stack Up Against Industry Performance?

Simply Wall St

After looking at Carlisle Companies Incorporated's (NYSE:CSL) latest earnings announcement (30 September 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Carlisle Companies's performance has been impacted by industry movements. In this article I briefly touch on my key findings.

Check out our latest analysis for Carlisle Companies

Commentary On CSL's Past Performance

CSL's trailing twelve-month earnings (from 30 September 2019) of US$460m has jumped 23% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 9.6%, indicating the rate at which CSL is growing has accelerated. How has it been able to do this? Let's see whether it is only attributable to industry tailwinds, or if Carlisle Companies has experienced some company-specific growth.

NYSE:CSL Income Statement, December 3rd 2019

In terms of returns from investment, Carlisle Companies has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. Furthermore, its return on assets (ROA) of 9.3% is below the US Industrials industry of 9.3%, indicating Carlisle Companies's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Carlisle Companies’s debt level, has declined over the past 3 years from 18% to 14%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 35% to 59% over the past 5 years.

What does this mean?

Though Carlisle Companies'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? You should continue to research Carlisle Companies to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for CSL’s future growth? Take a look at our free research report of analyst consensus for CSL’s outlook.
  2. Financial Health: Are CSL’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 trailing twelve months from 30 September 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.