Measuring IGM Financial Inc.'s (TSE:IGM) 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 IGM's recent performance announced on 31 March 2019 and compare these figures to its historical trend and industry movements.
How Well Did IGM Perform?
IGM's trailing twelve-month earnings (from 31 March 2019) of CA$749m has jumped 23% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -2.8%, indicating the rate at which IGM is growing has accelerated. How has it been able to do this? Let's take a look at if it is solely because of industry tailwinds, or if IGM Financial has experienced some company-specific growth.
In terms of returns from investment, IGM Financial has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. Furthermore, its return on assets (ROA) of 6.5% is below the CA Capital Markets industry of 9.1%, indicating IGM Financial's are utilized less efficiently. However, its return on capital (ROC), which also accounts for IGM Financial’s debt level, has increased over the past 3 years from 8.9% to 9.2%.
What does this mean?
Though IGM Financial's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as IGM Financial gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research IGM Financial to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for IGM’s future growth? Take a look at our free research report of analyst consensus for IGM’s outlook.
- Financial Health: Are IGM’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.
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