Does Sirius Real Estate Limited's (LON:SRE) Recent Track Record Look Strong?
Assessing Sirius Real Estate Limited's (LSE:SRE) 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 SRE's recent performance announced on 30 September 2019 and evaluate these figures to its long-term trend and industry movements.
View our latest analysis for Sirius Real Estate
Were SRE's earnings stronger than its past performances and the industry?
SRE's trailing twelve-month earnings (from 30 September 2019) of €128m has jumped 27% 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 29%, indicating the rate at which SRE is growing has slowed down. What could be happening here? Well, let's examine what's going on with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Sirius Real Estate has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 11% exceeds the GB Real Estate industry of 5.3%, indicating Sirius Real Estate has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Sirius Real Estate’s debt level, has increased over the past 3 years from 4.7% to 5.0%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 94% to 43% over the past 5 years.
What does this mean?
Though Sirius Real Estate's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Sirius Real Estate to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for SRE’s future growth? Take a look at our free research report of analyst consensus for SRE’s outlook.
Financial Health: Are SRE’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 September 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.
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