How Has Tivoli A/S’s (CPH:TIV) Earnings Fared Against The Long Term Trend

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For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Tivoli A/S’s (CPH:TIV) 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.

Check out our latest analysis for Tivoli

Did TIV’s recent earnings growth beat the long-term trend and the industry?

TIV’s trailing twelve-month earnings (from 31 March 2019) of ø86m has increased by 0.7% 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 21%, indicating the rate at which TIV is growing has slowed down. Why could this be happening? Well, let’s look at what’s going on with margins and whether the rest of the industry is feeling the heat.

CPSE:TIV Income Statement, July 3rd 2019
CPSE:TIV Income Statement, July 3rd 2019

In terms of returns from investment, Tivoli has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. However, its return on assets (ROA) of 6.1% exceeds the DK Hospitality industry of 5.2%, indicating Tivoli has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Tivoli’s debt level, has increased over the past 3 years from 9.1% to 9.7%.

What does this mean?

Though Tivoli’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Tivoli gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Tivoli to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for TIV’s future growth? Take a look at our free research report of analyst consensus for TIV’s outlook.
  2. Financial Health: Are TIV’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 31 March 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.