Where Delta Apparel, Inc. (NYSEMKT:DLA) Stands In Terms Of Earnings Growth Against Its Industry
For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Delta Apparel, Inc.'s (AMEX:DLA) 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.
View our latest analysis for Delta Apparel
How DLA fared against its long-term earnings performance and its industry
DLA's trailing twelve-month earnings (from 28 December 2019) of US$10m has increased by 2.7% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.4%, indicating the rate at which DLA is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Delta Apparel has fallen short of achieving a 20% return on equity (ROE), recording 6.4% instead. Furthermore, its return on assets (ROA) of 4.1% is below the US Luxury industry of 6.4%, indicating Delta Apparel's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Delta Apparel’s debt level, has declined over the past 3 years from 6.4% to 4.4%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Delta Apparel 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 Delta Apparel to get a more holistic view of the stock by looking at:
Financial Health: Are DLA’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 28 December 2019. This may not be consistent with full year annual report figures.
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.
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