Yahoo Finance Was Alimentation Couche-Tard Inc.’s (TSE:ATD.B) Earnings Growth Better Than The Industry’s?
Understanding how Alimentation Couche-Tard Inc. (TSE:ATD.B) 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 Alimentation Couche-Tard is doing by comparing its latest earnings with its long-term trend as well as the performance of its consumer retailing industry peers.
Check out our latest analysis for Alimentation Couche-Tard
Were ATD.B’s earnings stronger than its past performances and the industry?
ATD.B’s trailing twelve-month earnings (from 14 October 2018) of US$1.8b has jumped 33% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 17%, indicating the rate at which ATD.B is growing has accelerated. What’s the driver of this growth? Let’s see if it is merely attributable to industry tailwinds, or if Alimentation Couche-Tard has seen some company-specific growth.
In terms of returns from investment, Alimentation Couche-Tard has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 9.3% exceeds the CA Consumer Retailing industry of 5.1%, indicating Alimentation Couche-Tard has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Alimentation Couche-Tard’s debt level, has declined over the past 3 years from 18% to 12%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 87% to 95% over the past 5 years.
What does this mean?
Though Alimentation Couche-Tard’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Alimentation Couche-Tard gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Alimentation Couche-Tard to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ATD.B’s future growth? Take a look at our free research report of analyst consensus for ATD.B’s outlook.
Financial Health: Are ATD.B’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 14 October 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
