Does Toromont Industries Ltd.'s (TSE:TIH) Recent Track Record Look Strong?
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Examining Toromont Industries Ltd.'s (TSE:TIH) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess TIH's latest performance announced on 31 December 2018 and weight these figures against its longer term trend and industry movements.
See our latest analysis for Toromont Industries
How Well Did TIH Perform?
TIH's trailing twelve-month earnings (from 31 December 2018) of CA$252m has jumped 43% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which TIH is growing has accelerated. How has it been able to do this? Let's take a look at whether it is merely owing to industry tailwinds, or if Toromont Industries has experienced some company-specific growth.
In terms of returns from investment, Toromont Industries has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 8.5% exceeds the CA Trade Distributors industry of 5.4%, indicating Toromont Industries has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Toromont Industries’s debt level, has declined over the past 3 years from 21% to 18%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 23% to 49% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Toromont Industries to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TIH’s future growth? Take a look at our free research report of analyst consensus for TIH’s outlook.
Financial Health: Are TIH’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 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
