Yahoo Finance Should You Be Concerned About CCL Industries Inc.'s (TSE:CCL.B) Earnings Growth?
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Today I will take a look at CCL Industries Inc.'s (TSE:CCL.B) most recent earnings update (31 December 2018) and compare these latest figures against its performance over the past few years, as well as how the rest of the packaging industry performed. As an investor, I find it beneficial to assess CCL.B’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
Check out our latest analysis for CCL Industries
Commentary On CCL.B's Past Performance
CCL.B's trailing twelve-month earnings (from 31 December 2018) of CA$467m has declined by -1.5% 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 25%, indicating the rate at which CCL.B is growing has slowed down. What could be happening here? 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, CCL Industries has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 7.7% exceeds the CA Packaging industry of 7.1%, indicating CCL Industries has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for CCL Industries’s debt level, has declined over the past 3 years from 17% to 12%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 70% to 95% 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 unpredictable earnings, can have many factors affecting its business. You should continue to research CCL Industries to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for CCL.B’s future growth? Take a look at our free research report of analyst consensus for CCL.B’s outlook.
Financial Health: Are CCL.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 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.
