Where DHT Holdings Inc (DHT) Stands In Terms Of Earnings Growth Against Its Industry
After looking at DHT Holdings Inc’s (NYSE:DHT) latest earnings announcement (30 September 2017), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. 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. See our latest analysis for DHT
Commentary On DHT’s Past Performance
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to analyze different companies on a similar basis, using the most relevant data points. For DHT Holdings, the most recent bottom-line is $31.9M, which, against the prior year’s figure, has increased by 33.90%. Given that these values are relatively nearsighted, I have determined an annualized five-year figure for DHT’s earnings, which stands at $1.3M. This means that, generally, DHT Holdings has been able to increasingly improve its net income over the past few years as well.
What’s the driver of this growth? Let’s see if it is merely because of industry tailwinds, or if DHT Holdings has experienced some company-specific growth. Over the last few years, DHT Holdings grew its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Viewing growth from a sector-level, the US oil, gas and consumable fuels industry has been growing its average earnings by double-digit 13.67% in the previous twelve months, and a flatter -1.07% over the past five years. This means that, in the recent industry expansion, DHT Holdings is able to amplify this to its advantage.
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 recommend you continue to research DHT Holdings to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for DHT’s future growth? Take a look at our free research report of analyst consensus for DHT’s outlook.
2. Financial Health: Is DHT’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.
3. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
