When Compagnie Plastic Omnium SA's (EPA:POM) announced its latest earnings (31 December 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Compagnie Plastic Omnium's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not POM actually performed well. Below is a quick commentary on how I see POM has performed.
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How Well Did POM Perform?
POM's trailing twelve-month earnings (from 31 December 2018) of €532m has jumped 31% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 20%, indicating the rate at which POM is growing has accelerated. What's the driver of this growth? Let's see whether it is solely attributable to an industry uplift, or if Compagnie Plastic Omnium has experienced some company-specific growth.
In terms of returns from investment, Compagnie Plastic Omnium has invested its equity funds well leading to a 25% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 8.8% exceeds the FR Auto Components industry of 6.1%, indicating Compagnie Plastic Omnium has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Compagnie Plastic Omnium’s debt level, has declined over the past 3 years from 17% to 13%.
What does this mean?
Compagnie Plastic Omnium's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Compagnie Plastic Omnium 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 Compagnie Plastic Omnium to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for POM’s future growth? Take a look at our free research report of analyst consensus for POM’s outlook.
- Financial Health: Are POM’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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