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Examining Swiss Water Decaffeinated Coffee Inc.'s (TSE:SWP) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess SWP's latest performance announced on 31 March 2019 and compare these figures to its longer term trend and industry movements.
Could SWP beat the long-term trend and outperform its industry?
SWP's trailing twelve-month earnings (from 31 March 2019) of CA$4.0m has jumped 25% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 15%, indicating the rate at which SWP is growing has accelerated. What's enabled this growth? Let's take a look at whether it is only due to an industry uplift, or if Swiss Water Decaffeinated Coffee has experienced some company-specific growth.
In terms of returns from investment, Swiss Water Decaffeinated Coffee has fallen short of achieving a 20% return on equity (ROE), recording 8.7% instead. Furthermore, its return on assets (ROA) of 4.7% is below the CA Food industry of 5.6%, indicating Swiss Water Decaffeinated Coffee's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Swiss Water Decaffeinated Coffee’s debt level, has declined over the past 3 years from 9.7% to 6.4%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 30% to 52% over the past 5 years.
What does this mean?
Though Swiss Water Decaffeinated Coffee's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Swiss Water Decaffeinated Coffee gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Swiss Water Decaffeinated Coffee to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SWP’s future growth? Take a look at our free research report of analyst consensus for SWP’s outlook.
- Financial Health: Are SWP’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.