Horace Mann Educators Corporation’s (NYSE:HMN) Earnings Dropped -20%, Did Its Industry Show Weakness Too?

When Horace Mann Educators Corporation’s (NYSE:HMN) announced its latest earnings (30 September 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Horace Mann Educators’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not HMN actually performed well. Below is a quick commentary on how I see HMN has performed.

See our latest analysis for Horace Mann Educators

Was HMN’s recent earnings decline worse than the long-term trend and the industry?

HMN’s trailing twelve-month earnings (from 30 September 2019) of US$131m has declined by -20% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 2.3%, indicating the rate at which HMN is growing has slowed down. What could be happening here? Well, let’s look at what’s occurring with margins and whether the entire industry is feeling the heat.

NYSE:HMN Income Statement, November 25th 2019
NYSE:HMN Income Statement, November 25th 2019

In terms of returns from investment, Horace Mann Educators has fallen short of achieving a 20% return on equity (ROE), recording 8.3% instead. Furthermore, its return on assets (ROA) of 1.2% is below the US Insurance industry of 2.3%, indicating Horace Mann Educators’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Horace Mann Educators’s debt level, has increased over the past 3 years from 1.3% to 1.8%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Horace Mann Educators to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for HMN’s future growth? Take a look at our free research report of analyst consensus for HMN’s outlook.
  2. Financial Health: Are HMN’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 30 September 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 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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