Yahoo Finance Does Martinrea International Inc.'s (TSE:MRE) 7.7% Earnings Growth Reflect The Long-Term Trend?
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Measuring Martinrea International Inc.'s (TSE:MRE) 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 MRE's recent performance announced on 31 March 2019 and weigh these figures against its long-term trend and industry movements.
View our latest analysis for Martinrea International
Did MRE's recent earnings growth beat the long-term trend and the industry?
MRE's trailing twelve-month earnings (from 31 March 2019) of CA$185m has increased by 7.7% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 31%, indicating the rate at which MRE is growing has slowed down. To understand what's happening, let's look at what's occurring with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, Martinrea International has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. Furthermore, its return on assets (ROA) of 6.7% is below the CA Auto Components industry of 7.1%, indicating Martinrea International's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Martinrea International’s debt level, has increased over the past 3 years from 11% to 13%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 88% to 88% over the past 5 years.
What does this mean?
Though Martinrea International's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Martinrea International to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for MRE’s future growth? Take a look at our free research report of analyst consensus for MRE’s outlook.
Financial Health: Are MRE’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.
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.
