Has International Flavors & Fragrances Inc. (NYSE:IFF) Improved Earnings Growth In Recent Times?
Assessing International Flavors & Fragrances Inc.'s (NYSE:IFF) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess IFF's latest performance announced on 31 December 2018 and evaluate these figures to its historical trend and industry movements.
See our latest analysis for International Flavors & Fragrances
How Did IFF's Recent Performance Stack Up Against Its Past?
IFF's trailing twelve-month earnings (from 31 December 2018) of US$333m has jumped 13% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -4.3%, indicating the rate at which IFF is growing has accelerated. What's enabled this growth? Let's see whether it is solely due to industry tailwinds, or if International Flavors & Fragrances has experienced some company-specific growth.
In terms of returns from investment, International Flavors & Fragrances has fallen short of achieving a 20% return on equity (ROE), recording 5.5% instead. Furthermore, its return on assets (ROA) of 3.6% is below the US Chemicals industry of 7.7%, indicating International Flavors & Fragrances's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for International Flavors & Fragrances’s debt level, has declined over the past 3 years from 21% to 5.9%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 64% to 74% over the past 5 years.
What does this mean?
International Flavors & Fragrances's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. There may be factors that are impacting the industry as a whole, thus the high industry growth rate over the same time frame. You should continue to research International Flavors & Fragrances to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for IFF’s future growth? Take a look at our free research report of analyst consensus for IFF’s outlook.
Financial Health: Are IFF’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 2018. 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.
