Want To Invest In Ruth's Hospitality Group, Inc. (NASDAQ:RUTH)? Here's How It Performed Lately
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After reading Ruth's Hospitality Group, Inc.'s (NASDAQ:RUTH) most recent earnings announcement (31 March 2019), I found it useful to look back at how the company has performed in the past 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 a crucial aspect. Below is a brief commentary on my key takeaways.
View our latest analysis for Ruth's Hospitality Group
Were RUTH's earnings stronger than its past performances and the industry?
RUTH's trailing twelve-month earnings (from 31 March 2019) of US$42m has jumped 28% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 9.0%, indicating the rate at which RUTH is growing has accelerated. What's the driver of this growth? Let's see whether it is merely owing to an industry uplift, or if Ruth's Hospitality Group has seen some company-specific growth.
In terms of returns from investment, Ruth's Hospitality Group has invested its equity funds well leading to a 42% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11% exceeds the US Hospitality industry of 6.0%, indicating Ruth's Hospitality Group has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Ruth's Hospitality Group’s debt level, has declined over the past 3 years from 38% to 17%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 21% to 40% over the past 5 years.
What does this mean?
Though Ruth's Hospitality Group's past data is helpful, it is only one aspect of my investment thesis. While Ruth's Hospitality Group 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 Ruth's Hospitality Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for RUTH’s future growth? Take a look at our free research report of analyst consensus for RUTH’s outlook.
Financial Health: Are RUTH’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 editorial-team@simplywallst.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.
