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Assessing The York Water Company’s (NASDAQ:YORW) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess YORW’s recent performance announced on 31 December 2018 and evaluate these figures to its longer term trend and industry movements.
Commentary On YORW’s Past Performance
YORW’s trailing twelve-month earnings (from 31 December 2018) of US$13m has increased by 3.1% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 5.3%, indicating the rate at which YORW is growing has slowed down. What could be happening here? Well, let’s look at what’s transpiring with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, York Water has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 5.5% exceeds the US Water Utilities industry of 3.9%, indicating York Water has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for York Water’s debt level, has declined over the past 3 years from 7.4% to 6.4%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While York Water has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research York Water to get a more holistic view of the stock by looking at:
- Financial Health: Are YORW’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 firstname.lastname@example.org. 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.