For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Kearny Financial Corp (NASDAQ:KRNY) useful as an attempt to give more color around how Kearny Financial is currently performing.
Did KRNY beat its long-term earnings growth trend and its industry?
KRNY’s trailing twelve-month earnings (from 30 June 2018) of US$20m has increased by 5.3% 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 21%, indicating the rate at which KRNY is growing has slowed down. What could be happening here? Well, let’s examine what’s occurring with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, Kearny Financial has fallen short of achieving a 20% return on equity (ROE), recording 1.5% instead. Furthermore, its return on assets (ROA) of 0.3% is below the US Mortgage industry of 0.7%, indicating Kearny Financial’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Kearny Financial’s debt level, has increased over the past 3 years from 0.7% to 1.6%.
What does this mean?
Though Kearny Financial’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Kearny Financial gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Kearny Financial to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for KRNY’s future growth? Take a look at our free research report of analyst consensus for KRNY’s outlook.
- Financial Health: Are KRNY’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 June 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at email@example.com.