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Interested In Delegat Group Limited (NZSE:DGL)? Here's How It Performed Recently

Simply Wall St

Understanding how Delegat Group Limited (NZSE:DGL) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Delegat Group is doing by comparing its latest earnings with its long-term trend as well as the performance of its beverage industry peers.

See our latest analysis for Delegat Group

Did DGL perform better than its track record and industry?

DGL's trailing twelve-month earnings (from 30 June 2019) of NZ$47m has increased by 1.1% 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 5.5%, indicating the rate at which DGL is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and whether the whole industry is facing the same headwind.

NZSE:DGL Income Statement, October 28th 2019

In terms of returns from investment, Delegat Group has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 8.1% exceeds the NZ Beverage industry of 5.9%, indicating Delegat Group has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Delegat Group’s debt level, has declined over the past 3 years from 13% to 11%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 64% to 76% over the past 5 years.

What does this mean?

Delegat Group's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Delegat Group has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Delegat Group to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for DGL’s future growth? Take a look at our free research report of analyst consensus for DGL’s outlook.
  2. Financial Health: Are DGL’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 30 June 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.