Stock Analysis

How Does Wajax Corporation's (TSE:WJX) Earnings Growth Stack Up Against Industry Performance? Wajax Corporation (TSE:WJX): Has Recent Earnings Growth Beaten Long-Term Trend?

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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 Wajax Corporation's (TSX:WJX) 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.

View our latest analysis for Wajax

Were WJX's earnings stronger than its past performances and the industry?

WJX's trailing twelve-month earnings (from 30 June 2019) of CA$35m has increased by 3.1% 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 4.1%, indicating the rate at which WJX is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is feeling the heat.

TSX:WJX Income Statement, September 3rd 2019
TSX:WJX Income Statement, September 3rd 2019

In terms of returns from investment, Wajax has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 4.9% exceeds the CA Trade Distributors industry of 4.3%, indicating Wajax has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Wajax’s debt level, has increased over the past 3 years from 7.4% to 9.9%.

What does this mean?

Though Wajax's past data is helpful, it is only one aspect of my investment thesis. While Wajax has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Wajax to get a more holistic view of the stock by looking at:

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