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For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine United-Guardian, Inc.'s (NASDAQ:UG) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
Did UG's recent earnings growth beat the long-term trend and the industry?
UG's trailing twelve-month earnings (from 31 March 2019) of US$4.5m has increased by 5.7% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.9%, indicating the rate at which UG is growing has accelerated. How has it been able to do this? Let's take a look at if it is merely because of industry tailwinds, or if United-Guardian has seen some company-specific growth.
In terms of returns from investment, United-Guardian has invested its equity funds well leading to a 37% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 31% exceeds the US Personal Products industry of 13%, indicating United-Guardian has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for United-Guardian’s debt level, has increased over the past 3 years from 32% to 43%.
What does this mean?
Though United-Guardian'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 recommend you continue to research United-Guardian to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for UG’s future growth? Take a look at our free research report of analyst consensus for UG’s outlook.
- Financial Health: Are UG’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 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. Thank you for reading.