Does Snap-on Incorporated’s (NYSE:SNA) 15% Earnings Growth Reflect The Long-Term Trend? Does Snap-on Incorporated’s (NYSE:SNA) Recent Track Record Look Strong?

Measuring Snap-on Incorporated’s (NYSE:SNA) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess SNA’s recent performance announced on 29 June 2019 and weigh these figures against its long-term trend and industry movements.

Check out our latest analysis for Snap-on

How Well Did SNA Perform?

SNA’s trailing twelve-month earnings (from 29 June 2019) of US$697m has jumped 15% 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 SNA is growing has accelerated. How has it been able to do this? Let’s take a look at if it is solely due to an industry uplift, or if Snap-on has experienced some company-specific growth.

NYSE:SNA Income Statement, August 30th 2019
NYSE:SNA Income Statement, August 30th 2019

In terms of returns from investment, Snap-on has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 13% exceeds the US Machinery industry of 7.5%, indicating Snap-on has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Snap-on’s debt level, has declined over the past 3 years from 22% to 21%.

What does this mean?

Though Snap-on’s past data is helpful, it is only one aspect of my investment thesis. While Snap-on has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Snap-on to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for SNA’s future growth? Take a look at our free research report of analyst consensus for SNA’s outlook.
  2. Financial Health: Are SNA’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.
  3. 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 29 June 2019. 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.