For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Dime Community Bancshares Inc’s (NASDAQ:DCOM) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. See our latest analysis for Dime Community Bancshares
Was DCOM’s recent earnings decline worse than the long-term trend and the industry?
I prefer to use 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 assess different stocks on a similar basis, using the latest information. For Dime Community Bancshares, its most recent bottom-line (trailing twelve month) is US$51.75M, which compared to the previous year’s level, has dropped by -28.53%. Given that these figures may be somewhat myopic, I’ve calculated an annualized five-year value for Dime Community Bancshares’s earnings, which stands at US$48.54M This means despite the fact that earnings growth was negative from last year, over the long run, Dime Community Bancshares’s profits have been rising on average.
What’s the driver of this growth? Let’s take a look at whether it is merely due to an industry uplift, or if Dime Community Bancshares has seen some company-specific growth. The hike in earnings seems to be propelled by a solid top-line increase overtaking its growth rate of costs. Though this has led to a margin contraction, it has made Dime Community Bancshares more profitable. Eyeballing growth from a sector-level, the US mortgage industry has been growing, albeit, at a subdued single-digit rate of 2.79% in the past year, and a substantial 12.12% over the last five years. This suggests that whatever near-term headwind the industry is facing, it’s hitting Dime Community Bancshares harder than its peers.
What does this mean?
Though Dime Community Bancshares’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. I recommend you continue to research Dime Community Bancshares to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for DCOM’s future growth? Take a look at our free research report of analyst consensus for DCOM’s outlook.
- Financial Health: Is DCOM’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 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.