Understanding how Geberit AG (VTX:GEBN) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Geberit is doing by comparing its latest earnings with its long-term trend as well as the performance of its building industry peers.
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Were GEBN's earnings stronger than its past performances and the industry?
GEBN's trailing twelve-month earnings (from 31 March 2019) of CHF614m has jumped 12% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 6.0%, indicating the rate at which GEBN is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is solely a result of an industry uplift, or if Geberit has experienced some company-specific growth.
In terms of returns from investment, Geberit has invested its equity funds well leading to a 35% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 18% exceeds the CH Building industry of 7.4%, indicating Geberit has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Geberit’s debt level, has increased over the past 3 years from 17% to 26%.
What does this mean?
Though Geberit's past data is helpful, it is only one aspect of my investment thesis. While Geberit has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Geberit to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GEBN’s future growth? Take a look at our free research report of analyst consensus for GEBN’s outlook.
- Financial Health: Are GEBN’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 March 2019. This may not be consistent with full year annual report figures.
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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.