Examining IDEX Corporation’s (NYSE:IEX) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess IEX’s latest performance announced on 30 September 2018 and weigh these figures against its longer term trend and industry movements.
Commentary On IEX’s Past Performance
IEX’s trailing twelve-month earnings (from 30 September 2018) of US$406m has jumped 35% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 11%, indicating the rate at which IEX is growing has accelerated. What’s the driver of this growth? Let’s take a look at whether it is only owing to an industry uplift, or if IDEX has seen some company-specific growth.
In terms of returns from investment, IDEX has fallen short of achieving a 20% return on equity (ROE), recording 20% instead. However, its return on assets (ROA) of 13% exceeds the US Machinery industry of 6.6%, indicating IDEX has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for IDEX’s debt level, has increased over the past 3 years from 17% to 18%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 52% to 41% over the past 5 years.
What does this mean?
Though IDEX’s past data is helpful, it is only one aspect of my investment thesis. 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 IDEX to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for IEX’s future growth? Take a look at our free research report of analyst consensus for IEX’s outlook.
- Financial Health: Are IEX’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 September 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 email@example.com.