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Where Fraser and Neave, Limited (SGX:F99) Stands In Terms Of Earnings Growth Against Its Industry

Simply Wall St
·3 min read

Assessing Fraser and Neave, Limited's (SGX:F99) 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 F99's recent performance announced on 31 December 2019 and evaluate these figures to its long-term trend and industry movements.

View our latest analysis for Fraser and Neave

How F99 fared against its long-term earnings performance and its industry

F99's trailing twelve-month earnings (from 31 December 2019) of S$154m has jumped 13% 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 23%, indicating the rate at which F99 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 entire industry is facing the same headwind.

SGX:F99 Income Statement April 30th 2020
SGX:F99 Income Statement April 30th 2020

In terms of returns from investment, Fraser and Neave has fallen short of achieving a 20% return on equity (ROE), recording 6.4% instead. Furthermore, its return on assets (ROA) of 3.6% is below the SG Food industry of 4.1%, indicating Fraser and Neave's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Fraser and Neave’s debt level, has increased over the past 3 years from 3.5% to 3.6%.

What does this mean?

Fraser and Neave's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. I suggest you continue to research Fraser and Neave to get a better picture of the stock by looking at:

  1. Financial Health: Are F99’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.

  2. Valuation: What is F99 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether F99 is currently mispriced by the market.

  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 trailing twelve months from 31 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.

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. Thank you for reading.