Interested In Rheinmetall AG (ETR:RHM)? Here's What Its Recent Performance Looks Like

Simply Wall St

Analyzing Rheinmetall AG's (XTRA:RHM) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess RHM's recent performance announced on 30 June 2019 and compare these figures to its long-term trend and industry movements.

View our latest analysis for Rheinmetall

How RHM fared against its long-term earnings performance and its industry

RHM's trailing twelve-month earnings (from 30 June 2019) of €333m has jumped 42% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 34%, indicating the rate at which RHM is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is only attributable to industry tailwinds, or if Rheinmetall has experienced some company-specific growth.

XTRA:RHM Income Statement, October 10th 2019

In terms of returns from investment, Rheinmetall has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 5.3% exceeds the DE Industrials industry of 2.3%, indicating Rheinmetall has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Rheinmetall’s debt level, has increased over the past 3 years from 8.3% to 12%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 73% to 42% over the past 5 years.

What does this mean?

Rheinmetall's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Rheinmetall to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for RHM’s future growth? Take a look at our free research report of analyst consensus for RHM’s outlook.
  2. Financial Health: Are RHM’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.