Shell Midstream Partners LP. (NYSE:SHLX)’s Earnings Grew 4.91%, Is It Enough?
Today I will examine Shell Midstream Partners LP.’s (NYSE:SHLX) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of SHLX’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for Shell Midstream Partners
How Did SHLX’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to analyze different stocks in a uniform manner using the latest information. For Shell Midstream Partners, its most recent earnings (trailing twelve month) is US$230.70M, which, relative to the prior year’s level, has grown by a relatively muted 4.91%. Given that these values are relatively short-term, I have created an annualized five-year value for Shell Midstream Partners’s net income, which stands at US$129.72M This suggests that, on average, Shell Midstream Partners has been able to consistently grow its bottom line over the last couple of years as well.
What’s the driver of this growth? Let’s see whether it is merely attributable to an industry uplift, or if Shell Midstream Partners has experienced some company-specific growth. In the past few years, Shell Midstream Partners expanded its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Scanning growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 23.39% in the prior year, . This is a change from a volatile drop of -8.15% in the previous couple of years. This means in the recent industry expansion, Shell Midstream Partners has not been able to gain as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Shell Midstream Partners has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Shell Midstream Partners to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for SHLX’s future growth? Take a look at our free research report of analyst consensus for SHLX’s outlook.
Financial Health: Is SHLX’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 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
