How Does Macquarie Group Limited’s (ASX:MQG) Earnings Growth Stack Up Against Industry Performance?
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Macquarie Group Limited’s (ASX:MQG) 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. See our latest analysis for Macquarie Group
How Well Did MQG Perform?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to analyze many different companies on a similar basis, using the most relevant data points. For Macquarie Group, its latest earnings (trailing twelve month) is A$2,304.0M, which, against the previous year’s figure, has climbed up by 18.52%. Since these values may be fairly short-term thinking, I have computed an annualized five-year value for Macquarie Group’s net income, which stands at A$1,365.6M. This means that, on average, Macquarie Group has been able to steadily raise its net income over the last couple of years as well.
How has it been able to do this? Let’s see if it is solely because of industry tailwinds, or if Macquarie Group has seen some company-specific growth. In the past couple of years, Macquarie Group expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Scanning growth from a sector-level, the Australian capital markets industry has been growing, albeit, at a muted single-digit rate of 3.16% over the past twelve months, and 8.12% over the past five. This means whatever near-term headwind the industry is experiencing, the impact on Macquarie Group has been softer relative to its peers.
What does this mean?
Macquarie Group’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Macquarie Group 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 Macquarie Group to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for MQG’s future growth? Take a look at our free research report of analyst consensus for MQG’s outlook.
2. Financial Health: Is MQG’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.
3. 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 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.
