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.
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