Assessing Metall Zug AG's (VTX:METN) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess METN's recent performance announced on 31 December 2018 and evaluate these figures to its longer term trend and industry movements.
Was METN's recent earnings decline indicative of a tough track record?
METN's trailing twelve-month earnings (from 31 December 2018) of CHF64m has declined by -6.1% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -8.1%, indicating the rate at which METN is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and whether the entire industry is feeling the heat.
In terms of returns from investment, Metall Zug has fallen short of achieving a 20% return on equity (ROE), recording 9.0% instead. Furthermore, its return on assets (ROA) of 5.8% is below the CH Consumer Durables industry of 6.0%, indicating Metall Zug's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Metall Zug’s debt level, has increased over the past 3 years from 9.2% to 10%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 1.1% to 0.7% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Generally companies that experience a prolonged period of diminishing earnings are going through some sort of reinvestment phase with the aim of keeping up with the recent industry disruption and expansion. I suggest you continue to research Metall Zug to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for METN’s future growth? Take a look at our free research report of analyst consensus for METN’s outlook.
- Financial Health: Are METN’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.
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 email@example.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.