U.S. Markets closed

DTE Energy Company (NYSE:DTE)'s Earnings Grew 5.9%, Is It Enough?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

When DTE Energy Company's (NYSE:DTE) announced its latest earnings (31 March 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were DTE Energy's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not DTE actually performed well. Below is a quick commentary on how I see DTE has performed.

See our latest analysis for DTE Energy

How Did DTE's Recent Performance Stack Up Against Its Past?

DTE's trailing twelve-month earnings (from 31 March 2019) of US$1.2b has increased by 5.9% 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 9.8%, indicating the rate at which DTE is growing has slowed down. Why could this be happening? Well, let's examine what's occurring with margins and if the entire industry is facing the same headwind.

NYSE:DTE Income Statement, May 30th 2019

In terms of returns from investment, DTE Energy has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 4.7% exceeds the US Integrated Utilities industry of 4.5%, indicating DTE Energy has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for DTE Energy’s debt level, has increased over the past 3 years from 4.9% to 4.9%.

What does this mean?

Though DTE Energy's past data is helpful, it is only one aspect of my investment thesis. 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 DTE Energy to get a better picture of the stock by looking at:

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