Paragon Care Limited (ASX:PGC): Did It Outperform The Industry?
Measuring Paragon Care Limited's (ASX:PGC) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess PGC's recent performance announced on 31 December 2018 and weigh these figures against its long-term trend and industry movements.
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Did PGC's recent performance beat its trend and industry?
PGC's trailing twelve-month earnings (from 31 December 2018) of AU$11m has declined by -0.5% 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 43%, indicating the rate at which PGC is growing has slowed down. Why is this? Well, let’s take a look at what’s transpiring with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Paragon Care has fallen short of achieving a 20% return on equity (ROE), recording 5.4% instead. Furthermore, its return on assets (ROA) of 3.9% is below the AU Healthcare industry of 4.2%, indicating Paragon Care's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Paragon Care’s debt level, has declined over the past 3 years from 5.7% to 4.3%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 23% to 50% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors affecting its business. I recommend you continue to research Paragon Care to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for PGC’s future growth? Take a look at our free research report of analyst consensus for PGC’s outlook.
Financial Health: Are PGC’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 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.
