Investors with a long-term horizong may find it valuable to assess ManpowerGroup Inc.'s (NYSE:MAN) 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 ManpowerGroup is currently performing.
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Was MAN weak performance lately part of a long-term decline?
MAN's trailing twelve-month earnings (from 31 March 2019) of US$513m has declined by -9.6% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 9.0%, indicating the rate at which MAN is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, ManpowerGroup has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. Furthermore, its return on assets (ROA) of 6.2% is below the US Professional Services industry of 6.5%, indicating ManpowerGroup's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for ManpowerGroup’s debt level, has declined over the past 3 years from 18% to 17%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 18% to 52% over the past 5 years.
What does this mean?
ManpowerGroup's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. You should continue to research ManpowerGroup to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MAN’s future growth? Take a look at our free research report of analyst consensus for MAN’s outlook.
- Financial Health: Are MAN’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 email@example.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.