Does Vienna Insurance Group AG's (VIE:VIG) -8.1% Earnings Drop Reflect A Longer Term Trend?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Today I will take a look at Vienna Insurance Group AG's (VIE:VIG) most recent earnings update (31 March 2019) and compare these latest figures against its performance over the past few years, as well as how the rest of the insurance industry performed. As an investor, I find it beneficial to assess VIG’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
Check out our latest analysis for Vienna Insurance Group
Was VIG's recent earnings decline worse than the long-term trend and the industry?
VIG's trailing twelve-month earnings (from 31 March 2019) of €269m has declined by -8.1% 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 4.4%, indicating the rate at which VIG is growing has slowed down. Why could this be happening? Let's examine what's going on with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Vienna Insurance Group has fallen short of achieving a 20% return on equity (ROE), recording 6.2% instead. Furthermore, its return on assets (ROA) of 0.7% is below the AT Insurance industry of 1.2%, indicating Vienna Insurance Group's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Vienna Insurance Group’s debt level, has declined over the past 3 years from 1.5% to 1.3%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 20% to 24% over the past 5 years.
What does this mean?
Though Vienna Insurance Group's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors affecting its business. I recommend you continue to research Vienna Insurance Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for VIG’s future growth? Take a look at our free research report of analyst consensus for VIG’s outlook.
Financial Health: Are VIG’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 March 2019. 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.
