Examining Sonoco Products Company's (NYSE:SON) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SON's latest performance announced on 29 September 2019 and weight these figures against its longer term trend and industry movements.
Commentary On SON's Past Performance
SON's trailing twelve-month earnings (from 29 September 2019) of US$325m has jumped 34% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.6%, indicating the rate at which SON is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is only a result of industry tailwinds, or if Sonoco Products has experienced some company-specific growth.
In terms of returns from investment, Sonoco Products has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 7.7% exceeds the US Packaging industry of 6.0%, indicating Sonoco Products has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Sonoco Products’s debt level, has increased over the past 3 years from 14% to 14%.
What does this mean?
Sonoco Products's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Sonoco Products gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Sonoco Products to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SON’s future growth? Take a look at our free research report of analyst consensus for SON’s outlook.
- Financial Health: Are SON’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 September 2019. This may not be consistent with full year annual report figures.
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