Yahoo Finance Where NFI Group Inc.'s (TSE:NFI) Earnings Growth Stands Against Its Industry
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After reading NFI Group Inc.'s (TSE:NFI) most recent earnings announcement (30 December 2018), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. 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 NFI Group's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
View our latest analysis for NFI Group
Was NFI's recent earnings decline worse than the long-term trend and the industry?
NFI's trailing twelve-month earnings (from 30 December 2018) of US$160m has declined by -16% 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 40%, indicating the rate at which NFI is growing has slowed down. Why is this? Let's examine what's occurring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, NFI Group has invested its equity funds well leading to a 20% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 9.0% exceeds the CA Machinery industry of 5.2%, indicating NFI Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for NFI Group’s debt level, has increased over the past 3 years from 7.7% to 15%.
What does this mean?
NFI Group's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. I suggest you continue to research NFI Group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for NFI’s future growth? Take a look at our free research report of analyst consensus for NFI’s outlook.
Financial Health: Are NFI’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 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.
