Assessing Greif, Inc.'s (NYSE:GEF) 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 GEF's recent performance announced on 31 January 2019 and evaluate these figures to its long-term trend and industry movements.
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How Well Did GEF Perform?
GEF's trailing twelve-month earnings (from 31 January 2019) of US$183m has increased by 7.6% 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 14%, indicating the rate at which GEF is growing has slowed down. To understand what's happening, let’s take a look at what’s going on with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, Greif has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 7.0% exceeds the US Packaging industry of 6.6%, indicating Greif has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Greif’s debt level, has increased over the past 3 years from 11% to 15%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 109% to 95% over the past 5 years.
What does this mean?
Though Greif's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Greif gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Greif to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GEF’s future growth? Take a look at our free research report of analyst consensus for GEF’s outlook.
- Financial Health: Are GEF’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 January 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 firstname.lastname@example.org. 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.