Was The Middleby Corporation's (NASDAQ:MIDD) Earnings Growth Better Than The Industry's?
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Examining The Middleby Corporation's (NASDAQ:MIDD) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess MIDD's latest performance announced on 29 December 2018 and weigh these figures against its longer term trend and industry movements.
View our latest analysis for Middleby
Were MIDD's earnings stronger than its past performances and the industry?
MIDD's trailing twelve-month earnings (from 29 December 2018) of US$317m has increased by 6.4% 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 14%, indicating the rate at which MIDD is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Middleby has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 8.3% exceeds the US Machinery industry of 7.7%, indicating Middleby has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Middleby’s debt level, has declined over the past 3 years from 15% to 13%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 69% to 114% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Middleby has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Middleby to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for MIDD’s future growth? Take a look at our free research report of analyst consensus for MIDD’s outlook.
Financial Health: Are MIDD’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 29 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.
