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Has nib holdings limited (ASX:NHF) Improved Earnings Growth In Recent Times?

Simply Wall St

Analyzing nib holdings limited's (ASX:NHF) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess NHF's recent performance announced on 30 June 2019 and compare these figures to its long-term trend and industry movements.

View our latest analysis for nib holdings

Did NHF beat its long-term earnings growth trend and its industry?

NHF's trailing twelve-month earnings (from 30 June 2019) of AU$149m has jumped 13% 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 16%, indicating the rate at which NHF is growing has slowed down. Why could this be happening? Well, let's examine what's going on with margins and whether the whole industry is facing the same headwind.

ASX:NHF Income Statement, September 25th 2019

In terms of returns from investment, nib holdings has invested its equity funds well leading to a 24% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 10% exceeds the AU Insurance industry of 4.3%, indicating nib holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for nib holdings’s debt level, has increased over the past 3 years from 22% to 23%.

What does this mean?

Though nib holdings's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as nib holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research nib holdings to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for NHF’s future growth? Take a look at our free research report of analyst consensus for NHF’s outlook.
  2. Financial Health: Are NHF’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 30 June 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 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.