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Examining Mainfreight Limited’s (NZSE:MFT) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess MFT’s latest performance announced on 30 September 2018 and weigh these figures against its longer term trend and industry movements.
How Did MFT’s Recent Performance Stack Up Against Its Past?
MFT’s trailing twelve-month earnings (from 30 September 2018) of NZ$121m has jumped 19% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 7.5%, indicating the rate at which MFT is growing has accelerated. What’s the driver of this growth? Let’s see if it is only due to an industry uplift, or if Mainfreight has experienced some company-specific growth.
In terms of returns from investment, Mainfreight has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 8.7% exceeds the NZ Logistics industry of 8.5%, indicating Mainfreight has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Mainfreight’s debt level, has increased over the past 3 years from 14% to 17%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 67% to 38% over the past 5 years.
What does this mean?
Mainfreight’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Mainfreight gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Mainfreight to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MFT’s future growth? Take a look at our free research report of analyst consensus for MFT’s outlook.
- Financial Health: Are MFT’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 firstname.lastname@example.org.