After looking at N.V. Nederlandsche Apparatenfabriek Nedap’s (ENXTAM:NEDAP) latest earnings announcement (30 June 2019), 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 tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
How Did NEDAP’s Recent Performance Stack Up Against Its Past?
NEDAP’s trailing twelve-month earnings (from 30 June 2019) of €15m has jumped 10% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 2.6%, indicating the rate at which NEDAP is growing has accelerated. What’s the driver of this growth? Let’s see whether it is merely because of an industry uplift, or if N.V. Nederlandsche Apparatenfabriek Nedap has seen some company-specific growth.
In terms of returns from investment, N.V. Nederlandsche Apparatenfabriek Nedap has invested its equity funds well leading to a 27% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 13% exceeds the NL Electronic industry of 6.3%, indicating N.V. Nederlandsche Apparatenfabriek Nedap has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for N.V. Nederlandsche Apparatenfabriek Nedap’s debt level, has increased over the past 3 years from 17% to 24%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 69% to 50% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as N.V. Nederlandsche Apparatenfabriek Nedap gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research N.V. Nederlandsche Apparatenfabriek Nedap to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for NEDAP’s future growth? Take a look at our free research report of analyst consensus for NEDAP’s outlook.
- Financial Health: Are NEDAP’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 2019. This may not be consistent with full year annual report figures.
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