Yahoo Finance Want To Invest In Taylor Wimpey plc (LON:TW.)? Here’s How It Performed Lately
After looking at Taylor Wimpey plc’s (LON:TW.) latest earnings announcement (01 July 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Taylor Wimpey’s performance has been impacted by industry movements. In this article I briefly touch on my key findings.
View our latest analysis for Taylor Wimpey
Could TW. beat the long-term trend and outperform its industry?
TW.’s trailing twelve-month earnings (from 01 July 2018) of UK£634m has jumped 17% 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 19%, indicating the rate at which TW. is growing has slowed down. To understand what’s happening, let’s look at what’s transpiring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Taylor Wimpey 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 12% exceeds the GB Consumer Durables industry of 11%, indicating Taylor Wimpey has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Taylor Wimpey’s debt level, has increased over the past 3 years from 16% to 22%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 11% to 4.0% over the past 5 years.
What does this mean?
Taylor Wimpey’s track record can be a valuable insight into its earnings performance, but it certainly 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? I suggest you continue to research Taylor Wimpey to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TW.’s future growth? Take a look at our free research report of analyst consensus for TW.’s outlook.
Financial Health: Are TW.’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 01 July 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.
