Investors with a long-term horizong may find it valuable to assess W. R. Berkley Corporation's (NYSE:WRB) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how W. R. Berkley is currently performing.
Commentary On WRB's Past Performance
WRB's trailing twelve-month earnings (from 31 March 2019) of US$655m has jumped 11% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 1.9%, indicating the rate at which WRB is growing has accelerated. How has it been able to do this? Let's take a look at whether it is merely due to an industry uplift, or if W. R. Berkley has experienced some company-specific growth.
In terms of returns from investment, W. R. Berkley has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 3.2% exceeds the US Insurance industry of 2.5%, indicating W. R. Berkley has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for W. R. Berkley’s debt level, has increased over the past 3 years from 4.7% to 9.8%.
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 recommend you continue to research W. R. Berkley to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for WRB’s future growth? Take a look at our free research report of analyst consensus for WRB’s outlook.
- Financial Health: Are WRB’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 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 email@example.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.