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Does Portland General Electric Company’s (NYSE:POR) Past Performance Indicate A Weaker Future?

Measuring Portland General Electric Company’s (NYSE:POR) 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 POR’s recent performance announced on 30 June 2018 and compare these figures to its historical trend and industry movements.

See our latest analysis for Portland General Electric

Did POR perform worse than its track record and industry?

POR’s trailing twelve-month earnings (from 30 June 2018) of US$192m has declined by -4.0% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 11%, indicating the rate at which POR is growing has slowed down. What could be happening here? Let’s examine what’s occurring with margins and whether the rest of the industry is experiencing the hit as well.

NYSE:POR Income Statement Export October 26th 18

In terms of returns from investment, Portland General Electric has fallen short of achieving a 20% return on equity (ROE), recording 7.8% instead. However, its return on assets (ROA) of 4.0% exceeds the US Electric Utilities industry of 4.0%, indicating Portland General Electric has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Portland General Electric’s debt level, has increased over the past 3 years from 3.3% to 3.6%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 99% to 98% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I recommend you continue to research Portland General Electric to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for POR’s future growth? Take a look at our free research report of analyst consensus for POR’s outlook.
  2. Financial Health: Are POR’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 June 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.