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Marine Products Corporation (NYSE:MPX): Has Recent Earnings Growth Beaten Long-Term Trend?

Simply Wall St

After looking at Marine Products Corporation's (NYSE:MPX) latest earnings announcement (31 December 2018), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.

See our latest analysis for Marine Products

Could MPX beat the long-term trend and outperform its industry?

MPX's trailing twelve-month earnings (from 31 December 2018) of US$28m has jumped 48% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 25%, indicating the rate at which MPX is growing has accelerated. How has it been able to do this? Let's see if it is only a result of an industry uplift, or if Marine Products has experienced some company-specific growth.

NYSE:MPX Income Statement, April 25th 2019

In terms of returns from investment, Marine Products has invested its equity funds well leading to a 38% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 28% exceeds the US Leisure industry of 9.5%, indicating Marine Products has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Marine Products’s debt level, has increased over the past 3 years from 21% to 43%.

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 Marine Products to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for MPX’s future growth? Take a look at our free research report of analyst consensus for MPX’s outlook.
  2. Financial Health: Are MPX’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.
  3. 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.