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Examining Barnes Group Inc.'s (NYSE:B) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess B's latest performance announced on 31 December 2019 and weigh these figures against its longer term trend and industry movements.
How Did B's Recent Performance Stack Up Against Its Past?
B's trailing twelve-month earnings (from 31 December 2019) of US$158m has declined by -4.7% 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 1.9%, indicating the rate at which B is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and whether the entire industry is facing the same headwind.
In terms of returns from investment, Barnes Group has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 6.5% exceeds the US Machinery industry of 6.4%, indicating Barnes Group has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Barnes Group’s debt level, has declined over the past 3 years from 11% to 10%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 45% to 65% over the past 5 years.
What does this mean?
Barnes Group'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 influencing its business. I recommend you continue to research Barnes Group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for B’s future growth? Take a look at our free research report of analyst consensus for B’s outlook.
Financial Health: Are B’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 2019. This may not be consistent with full year annual report figures.
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.
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