Lifco AB (publ) (STO:LIFCO B)'s Earnings Grew 8.4%, Is It Enough?
Investors with a long-term horizong may find it valuable to assess Lifco AB (publ)'s (OM:LIFCO B) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Lifco is currently performing.
Check out our latest analysis for Lifco
Did LIFCO B beat its long-term earnings growth trend and its industry?
LIFCO B's trailing twelve-month earnings (from 31 December 2019) of kr1.5b has increased by 8.4% 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 19%, indicating the rate at which LIFCO B is growing has slowed down. What could be happening here? Well, let's look at what's occurring with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Lifco has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 8.9% exceeds the SE Industrials industry of 3.1%, indicating Lifco has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Lifco’s debt level, has declined over the past 3 years from 19% to 18%.
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? I recommend you continue to research Lifco to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for LIFCO B’s future growth? Take a look at our free research report of analyst consensus for LIFCO B’s outlook.
Financial Health: Are LIFCO B’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 2019. This may not be consistent with full year annual report figures.
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.
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