Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Continental Building Products, Inc.'s (NYSE:CBPX) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
How Did CBPX's Recent Performance Stack Up Against Its Past?
CBPX's trailing twelve-month earnings (from 30 June 2019) of US$67m has declined by -4.6% 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 35%, indicating the rate at which CBPX is growing has slowed down. Why could this be happening? Let's examine what's going on with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Continental Building Products has invested its equity funds well leading to a 20% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 12% exceeds the US Building industry of 8.1%, indicating Continental Building Products has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Continental Building Products’s debt level, has increased over the past 3 years from 9.9% to 16%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 139% to 78% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I recommend you continue to research Continental Building Products to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CBPX’s future growth? Take a look at our free research report of analyst consensus for CBPX’s outlook.
- Financial Health: Are CBPX’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 30 June 2019. This may not be consistent with full year annual report figures.
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