Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize!
Investors with a long-term horizong may find it valuable to assess Dover Motorsports, Inc.’s (NYSE:DVD) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Dover Motorsports is currently performing.
Was DVD weak performance lately part of a long-term decline?
DVD’s trailing twelve-month earnings (from 31 December 2018) of US$6.9m has declined by -17% 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 34%, indicating the rate at which DVD is growing has slowed down. What could be happening here? Well, let’s look at what’s occurring with margins and whether the entire industry is facing the same headwind.
In terms of returns from investment, Dover Motorsports has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 8.8% exceeds the US Hospitality industry of 7.5%, indicating Dover Motorsports has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Dover Motorsports’s debt level, has declined over the past 3 years from 11% to 9.6%.
What does this mean?
Dover Motorsports’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors affecting its business. I suggest you continue to research Dover Motorsports to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for DVD’s future growth? Take a look at our free research report of analyst consensus for DVD’s outlook.
- Financial Health: Are DVD’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.