Examining Spire Inc.’s (NYSE:SR) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SR’s latest performance announced on 31 December 2019 and weight these figures against its longer term trend and industry movements.
Commentary On SR’s Past Performance
SR’s trailing twelve-month earnings (from 31 December 2019) of US$175m has increased by 5.9% 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 11%, indicating the rate at which SR is growing has slowed down. To understand what’s happening, let’s look at what’s going on with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Spire has fallen short of achieving a 20% return on equity (ROE), recording 7.1% instead. Furthermore, its return on assets (ROA) of 3.5% is below the US Gas Utilities industry of 4.3%, indicating Spire’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Spire’s debt level, has declined over the past 3 years from 5.7% to 4.6%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. 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 Spire to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SR’s future growth? Take a look at our free research report of analyst consensus for SR’s outlook.
- Financial Health: Are SR’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 December 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at email@example.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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