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Analyzing Mondi plc’s (LON:MNDI) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess MNDI’s recent performance announced on 31 December 2018 and compare these figures to its long-term trend and industry movements.
Could MNDI beat the long-term trend and outperform its industry?
MNDI’s trailing twelve-month earnings (from 31 December 2018) of €824m has jumped 23% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which MNDI is growing has accelerated. How has it been able to do this? Let’s see if it is merely owing to industry tailwinds, or if Mondi has experienced some company-specific growth.
In terms of returns from investment, Mondi has invested its equity funds well leading to a 23% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11% exceeds the GB Forestry industry of 6.0%, indicating Mondi has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Mondi’s debt level, has increased over the past 3 years from 18% to 20%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 62% to 55% over the past 5 years.
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? I suggest you continue to research Mondi to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MNDI’s future growth? Take a look at our free research report of analyst consensus for MNDI’s outlook.
- Financial Health: Are MNDI’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 2018. 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 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. Thank you for reading.