Examining Superior Group of Companies, Inc.’s (NASDAQ:SGC) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SGC’s latest performance announced on 31 December 2018 and weight these figures against its longer term trend and industry movements.
How Did SGC’s Recent Performance Stack Up Against Its Past?
SGC’s trailing twelve-month earnings (from 31 December 2018) of US$17m 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 13%, indicating the rate at which SGC is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s occurring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Superior Group of Companies has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 6.0% is below the US Luxury industry of 8.7%, indicating Superior Group of Companies’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Superior Group of Companies’s debt level, has declined over the past 3 years from 15% to 8.9%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 37% to 78% over the past 5 years.
What does this mean?
Superior Group of Companies’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Superior Group of Companies has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Superior Group of Companies to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SGC’s future growth? Take a look at our free research report of analyst consensus for SGC’s outlook.
- Financial Health: Are SGC’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 31 December 2018. This may not be consistent with full year annual report figures.
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