Yahoo Finance Interested In TMX Group Limited (TSE:X)? Here’s What Its Recent Performance Looks Like
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on TMX Group Limited (TSE:X) useful as an attempt to give more color around how TMX Group is currently performing.
See our latest analysis for TMX Group
Did X beat its long-term earnings growth trend and its industry?
X’s trailing twelve-month earnings (from 30 June 2018) of CA$246m has jumped 36% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 15%, indicating the rate at which X is growing has accelerated. What’s enabled this growth? Let’s take a look at whether it is solely because of industry tailwinds, or if TMX Group has experienced some company-specific growth.
In terms of returns from investment, TMX Group has fallen short of achieving a 20% return on equity (ROE), recording 7.4% instead. Furthermore, its return on assets (ROA) of 1.3% is below the CA Capital Markets industry of 5.6%, indicating TMX Group’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for TMX Group’s debt level, has increased over the past 3 years from 4.8% to 6.4%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 46% to 36% over the past 5 years.
What does this mean?
Though TMX Group’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 recommend you continue to research TMX Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for X’s future growth? Take a look at our free research report of analyst consensus for X’s outlook.
Financial Health: Are X’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 30 June 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.
