After looking at Southern Missouri Bancorp Inc’s (NASDAQ:SMBC) latest earnings update (31 March 2018), I found it helpful to revisit the company’s performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings. View our latest analysis for Southern Missouri Bancorp
Did SMBC’s recent earnings growth beat the long-term trend and the industry?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to examine many different companies on a similar basis, using new information. For Southern Missouri Bancorp, its most recent trailing-twelve-month earnings is US$19.00M, which, in comparison to last year’s figure, has jumped up by 22.44%. Since these figures may be relatively short-term, I have created an annualized five-year figure for Southern Missouri Bancorp’s earnings, which stands at US$12.49M This means that, generally, Southern Missouri Bancorp has been able to increasingly raise its net income over the past couple of years as well.
What’s enabled this growth? Let’s take a look at whether it is solely owing to an industry uplift, or if Southern Missouri Bancorp has experienced some company-specific growth. The rise in earnings seems to be propelled by a strong top-line increase overtaking its growth rate of costs. Though this has led to a margin contraction, it has made Southern Missouri Bancorp more profitable. Looking at growth from a sector-level, the US mortgage industry has been growing, albeit, at a muted single-digit rate of 8.88% over the prior year, and a substantial 13.60% over the last five years. This means whatever tailwind the industry is enjoying, Southern Missouri Bancorp is capable of amplifying this to its advantage.
What does this mean?
Southern Missouri Bancorp’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Southern Missouri Bancorp has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Southern Missouri Bancorp to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SMBC’s future growth? Take a look at our free research report of analyst consensus for SMBC’s outlook.
- Financial Health: Is SMBC’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 2018. 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.