Examining how Vicat SA (EPA:VCT) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Vicat is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its basic materials industry peers.
How Did VCT’s Recent Performance Stack Up Against Its Past?
VCT’s trailing twelve-month earnings (from 30 June 2018) of €161m has jumped 23% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.5%, indicating the rate at which VCT is growing has accelerated. What’s the driver of this growth? Let’s see whether it is merely attributable to industry tailwinds, or if Vicat has seen some company-specific growth.
In terms of returns from investment, Vicat has fallen short of achieving a 20% return on equity (ROE), recording 7.4% instead. Furthermore, its return on assets (ROA) of 4.0% is below the FR Basic Materials industry of 4.5%, indicating Vicat’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Vicat’s debt level, has increased over the past 3 years from 4.5% to 6.0%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 64% to 51% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Vicat to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for VCT’s future growth? Take a look at our free research report of analyst consensus for VCT’s outlook.
- Financial Health: Are VCT’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 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.