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After looking at Genting Singapore Limited's (SGX:G13) latest earnings announcement (31 March 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
How G13 fared against its long-term earnings performance and its industry
G13's trailing twelve-month earnings (from 31 March 2019) of S$744m has jumped 17% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 13%, indicating the rate at which G13 is growing has accelerated. What's the driver of this growth? Well, let’s take a look at if it is only due to an industry uplift, or if Genting Singapore has experienced some company-specific growth.
In terms of returns from investment, Genting Singapore has fallen short of achieving a 20% return on equity (ROE), recording 9.3% instead. However, its return on assets (ROA) of 7.1% exceeds the SG Hospitality industry of 3.5%, indicating Genting Singapore has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Genting Singapore’s debt level, has increased over the past 3 years from 3.6% to 10%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 21% to 12% over the past 5 years.
What does this mean?
Genting Singapore's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Genting Singapore has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Genting Singapore to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for G13’s future growth? Take a look at our free research report of analyst consensus for G13’s outlook.
- Financial Health: Are G13’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 email@example.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.