Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at TrueBlue, Inc.'s (NYSE:TBI) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Could TBI beat the long-term trend and outperform its industry?
TBI's trailing twelve-month earnings (from 30 December 2018) of US$66m has jumped 19% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -1.5%, indicating the rate at which TBI is growing has accelerated. How has it been able to do this? Let's take a look at whether it is solely due to an industry uplift, or if TrueBlue has experienced some company-specific growth.
In terms of returns from investment, TrueBlue has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 5.8% is below the US Professional Services industry of 6.0%, indicating TrueBlue's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for TrueBlue’s debt level, has declined over the past 3 years from 9.6% to 9.1%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 8.1% to 14% over the past 5 years.
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 suggest you continue to research TrueBlue to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for TBI’s future growth? Take a look at our free research report of analyst consensus for TBI’s outlook.
- Financial Health: Are TBI’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 30 December 2018. This may not be consistent with full year annual report figures.
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