Yahoo Finance Where NVR, Inc. (NYSE:NVR) Stands In Terms Of Earnings Growth Against Its Industry
When NVR, Inc. (NYSE:NVR) announced its most recent earnings (31 March 2020), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how NVR performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see NVR has performed.
View our latest analysis for NVR
Did NVR beat its long-term earnings growth trend and its industry?
NVR's trailing twelve-month earnings (from 31 March 2020) of US$866m has increased by 5.6% 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 22%, indicating the rate at which NVR is growing has slowed down. Why could this be happening? Well, let's look at what's occurring with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, NVR has invested its equity funds well leading to a 36% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 23% exceeds the US Consumer Durables industry of 7.4%, indicating NVR has used its assets more efficiently. However, its return on capital (ROC), which also accounts for NVR’s debt level, has declined over the past 3 years from 33% to 31%.
What does this mean?
Though NVR's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as NVR gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research NVR to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for NVR’s future growth? Take a look at our free research report of analyst consensus for NVR’s outlook.
Financial Health: Are NVR’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 2020. This may not be consistent with full year annual report figures.
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.
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