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Analyzing Henry Schein, Inc.'s (NASDAQ:HSIC) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess HSIC's recent performance announced on 29 December 2018 and compare these figures to its long-term trend and industry movements.
Commentary On HSIC's Past Performance
HSIC's trailing twelve-month earnings (from 29 December 2018) of US$536m has jumped 31% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 0.6%, indicating the rate at which HSIC is growing has accelerated. How has it been able to do this? Let's take a look at if it is only due to industry tailwinds, or if Henry Schein has experienced some company-specific growth.
In terms of returns from investment, Henry Schein has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 7.0% exceeds the US Healthcare industry of 6.6%, indicating Henry Schein has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Henry Schein’s debt level, has declined over the past 3 years from 18% to 17%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 15% to 51% over the past 5 years.
What does this mean?
Henry Schein's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Henry Schein 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 Henry Schein to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for HSIC’s future growth? Take a look at our free research report of analyst consensus for HSIC’s outlook.
- Financial Health: Are HSIC’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 29 December 2018. This may not be consistent with full year annual report figures.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.