Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Portland General Electric Company’s (NYSE:POR) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Did POR’s recent performance beat its trend and industry?
POR’s trailing twelve-month earnings (from 31 December 2019) of US$214m has increased by 0.9% 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 4.7%, indicating the rate at which POR is growing has slowed down. To understand what’s happening, let’s examine what’s occurring with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Portland General Electric has fallen short of achieving a 20% return on equity (ROE), recording 8.3% instead. Furthermore, its return on assets (ROA) of 4.1% is below the US Electric Utilities industry of 4.2%, indicating Portland General Electric’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Portland General Electric’s debt level, has declined over the past 3 years from 4.7% to 4.4%.
What does this mean?
Though Portland General Electric’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Portland General Electric gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Portland General Electric to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for POR’s future growth? Take a look at our free research report of analyst consensus for POR’s outlook.
- Financial Health: Are POR’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 firstname.lastname@example.org. 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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