Should Portland General Electric Company's (NYSE:POR) Recent Earnings Worry You?
When Portland General Electric Company (NYSE:POR) released its most recent earnings update (31 March 2020), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Portland General Electric performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see POR has performed.
View our latest analysis for Portland General Electric
Have POR's earnings improved against past performances and the industry?
POR's trailing twelve-month earnings (from 31 March 2020) of US$222m has increased by 0.6% 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 5.0%, indicating the rate at which POR is growing has slowed down. To understand what's happening, let’s take a look at what’s transpiring with margins and if the whole industry is feeling the heat.
In terms of returns from investment, Portland General Electric has fallen short of achieving a 20% return on equity (ROE), recording 8.4% instead. However, its return on assets (ROA) of 4.2% exceeds the US Electric Utilities industry of 3.9%, indicating Portland General Electric has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Portland General Electric’s debt level, has declined over the past 3 years from 5.1% to 4.7%.
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 suggest you continue to research Portland General Electric to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for POR’s future growth? Take a look at our free research report of analyst consensus for POR’s outlook.
Financial Health: Are POR’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 2020. This may not be consistent with full year annual report figures.
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