After looking at Compagnie Plastic Omnium SA's (ENXTPA:POM) latest earnings announcement (30 June 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Compagnie Plastic Omnium's performance has been impacted by industry movements. In this article I briefly touch on my key findings.

Check out our latest analysis for Compagnie Plastic Omnium

How Well Did POM Perform?

POM's trailing twelve-month earnings (from 30 June 2019) of €463m has increased by 8.3% 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 19%, indicating the rate at which POM is growing has slowed down. Why could this be happening? Well, let's examine what's transpiring with margins and whether the rest of the industry is feeling the heat.

In terms of returns from investment, Compagnie Plastic Omnium has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 7.5% exceeds the FR Auto Components industry of 5.2%, 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 16% to 14%.

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. Companies that have performed well in the past, such as Compagnie Plastic Omnium gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Compagnie Plastic Omnium to get a more holistic view of the stock by looking at:

1. 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.

2. 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.

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 30 June 2019. This may not be consistent with full year annual report figures.

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.

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. Thank you for reading.