How Does Lydall Inc’s (NYSE:LDL) Earnings Growth Stack Up Against The Industry?
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Lydall Inc’s (NYSE:LDL) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
View our latest analysis for Lydall
Were LDL’s earnings stronger than its past performances and the industry?
LDL’s trailing twelve-month earnings (from 30 September 2018) of US$42m has increased by 4.3% 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 16%, indicating the rate at which LDL is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and if the whole industry is experiencing the hit as well.
In terms of returns from investment, Lydall has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 5.0% is below the US Machinery industry of 7.1%, indicating Lydall’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Lydall’s debt level, has declined over the past 3 years from 19% to 8.0%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 1.0% to 90% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Lydall has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Lydall to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for LDL’s future growth? Take a look at our free research report of analyst consensus for LDL’s outlook.
Financial Health: Are LDL’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 30 September 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
