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Measuring Iberpapel Gestión, S.A.'s (BME:IBG) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess IBG's recent performance announced on 31 March 2019 and compare these figures to its historical trend and industry movements.
How IBG fared against its long-term earnings performance and its industry
IBG's trailing twelve-month earnings (from 31 March 2019) of €26m has jumped 12% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 27%, indicating the rate at which IBG is growing has slowed down. To understand what's happening, let's examine what's transpiring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Iberpapel Gestión has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. However, its return on assets (ROA) of 7.0% exceeds the ES Forestry industry of 6.0%, indicating Iberpapel Gestión has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Iberpapel Gestión’s debt level, has declined over the past 3 years from 8.9% to 8.9%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 1.3% to 28% over the past 5 years.
What does this mean?
Though Iberpapel Gestión's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Iberpapel Gestión gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Iberpapel Gestión to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for IBG’s future growth? Take a look at our free research report of analyst consensus for IBG’s outlook.
- Financial Health: Are IBG’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 March 2019. 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.