Yahoo Finance Taylor Morrison Home Corporation (NYSE:TMHC): Did It Outperform The Industry?
Examining how Taylor Morrison Home Corporation (NYSE:TMHC) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Taylor Morrison Home is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its consumer durables industry peers.
Check out our latest analysis for Taylor Morrison Home
Commentary On TMHC’s Past Performance
TMHC’s trailing twelve-month earnings (from 30 June 2018) of US$157.5m has more than doubled from US$52.6m in the prior year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -14.4%, indicating the rate at which TMHC is growing has accelerated. What’s enabled this growth? Let’s take a look at whether it is solely owing to industry tailwinds, or if Taylor Morrison Home has seen some company-specific growth.
Over the past couple of years, Taylor Morrison Home top-line expansion has overtaken earnings and the growth rate of expenses. Though this has caused a margin contraction, it has cushioned Taylor Morrison Home’s earnings contraction. Viewing growth from a sector-level, the US consumer durables industry has been growing, albeit, at a subdued single-digit rate of 8.8% in the previous twelve months, and a substantial 15.0% over the last five years. This growth is a median of profitable companies of 25 Consumer Durables companies in US including China Energy Technology, Skyline Champion and Forbo Holding. This means whatever uplift the industry is gaining from, Taylor Morrison Home is able to amplify this to its advantage.
In terms of returns from investment, Taylor Morrison Home has fallen short of achieving a 20% return on equity (ROE), recording 8.5% instead. Furthermore, its return on assets (ROA) of 3.7% is below the US Consumer Durables industry of 6.8%, indicating Taylor Morrison Home’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Taylor Morrison Home’s debt level, has declined over the past 3 years from 9.8% to 9.4%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Taylor Morrison Home to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TMHC’s future growth? Take a look at our free research report of analyst consensus for TMHC’s outlook.
Financial Health: Are TMHC’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.
