Examining Southern Missouri Bancorp Inc’s (NASDAQ:SMBC) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SMBC’s latest performance announced on 31 March 2018 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for Southern Missouri Bancorp
How SMBC fared against its long-term earnings performance and its industry
SMBC’s trailing twelve-month earnings (from 31 March 2018) of US$19.00m has jumped 22.44% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 10.07%, indicating the rate at which SMBC is growing has accelerated. How has it been able to do this? Let’s see if it is solely attributable to industry tailwinds, or if Southern Missouri Bancorp has seen some company-specific growth.
The hike in earnings seems to be propelled by a substantial top-line increase beating its growth rate of expenses. Though this resulted in a margin contraction, it has made Southern Missouri Bancorp more profitable. Scanning growth from a sector-level, the US mortgage industry has been growing, albeit, at a unexciting single-digit rate of 8.64% over the prior year, and a substantial 14.14% over the past five. This shows that whatever tailwind the industry is enjoying, Southern Missouri Bancorp is able to leverage this to its advantage.
In terms of returns from investment, Southern Missouri Bancorp has not invested its equity funds well, leading to a 9.67% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 1.03% exceeds the US Mortgage industry of 0.64%, indicating Southern Missouri Bancorp has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Southern Missouri Bancorp’s debt level, has increased over the past 3 years from 8.57% to 10.09%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 58.72% to 36.92% over the past 5 years.
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. I recommend you continue to research Southern Missouri Bancorp to get a more holistic view 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.