Does The Howard Hughes Corporation's (NYSE:HHC) Past Performance Indicate A Stronger Future?
When The Howard Hughes Corporation (NYSE:HHC) announced its most recent earnings (31 December 2019), 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 Howard Hughes 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 HHC has performed.
Check out our latest analysis for Howard Hughes
How Did HHC's Recent Performance Stack Up Against Its Past?
HHC's trailing twelve-month earnings (from 31 December 2019) of US$74m has jumped 30% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 1.7%, indicating the rate at which HHC is growing has accelerated. What's the driver of this growth? Let's see if it is merely attributable to industry tailwinds, or if Howard Hughes has experienced some company-specific growth.
In terms of returns from investment, Howard Hughes has fallen short of achieving a 20% return on equity (ROE), recording 2.2% instead. Furthermore, its return on assets (ROA) of 2.0% is below the US Real Estate industry of 3.3%, indicating Howard Hughes's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Howard Hughes’s debt level, has declined over the past 3 years from 3.8% to 2.1%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 89% to 124% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. I recommend you continue to research Howard Hughes to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for HHC’s future growth? Take a look at our free research report of analyst consensus for HHC’s outlook.
Financial Health: Are HHC’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 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.
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