Investors with a long-term horizong may find it valuable to assess Compagnie Plastic Omnium SA’s (EPA:POM) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Compagnie Plastic Omnium is currently performing.
How Well Did POM Perform?
POM’s trailing twelve-month earnings (from 30 June 2018) of €448m has jumped 25% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 19%, indicating the rate at which POM is growing has accelerated. What’s the driver of this growth? Let’s see whether it is solely because of industry tailwinds, or if Compagnie Plastic Omnium has seen some company-specific growth.
In terms of returns from investment, Compagnie Plastic Omnium has invested its equity funds well leading to a 25% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 8.2% exceeds the FR Auto Components industry of 6.7%, indicating Compagnie Plastic Omnium has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Compagnie Plastic Omnium’s debt level, has increased over the past 3 years from 16% to 16%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 128% to 91% over the past 5 years.
What does this mean?
Though Compagnie Plastic Omnium’s past data is helpful, it is only one aspect of my investment thesis. While Compagnie Plastic Omnium has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Compagnie Plastic Omnium to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for POM’s future growth? Take a look at our free research report of analyst consensus for POM’s outlook.
- Financial Health: Are POM’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 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.