Has SEB SA (EPA:SK) Improved Earnings Growth In Recent Times?

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Measuring SEB SA’s (EPA:SK) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess SK’s recent performance announced on 31 December 2018 and weigh these figures against its long-term trend and industry movements.

See our latest analysis for SEB

Were SK’s earnings stronger than its past performances and the industry?

SK’s trailing twelve-month earnings (from 31 December 2018) of €419m has jumped 12% 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 20%, indicating the rate at which SK is growing has slowed down. To understand what’s happening, let’s examine what’s occurring with margins and if the whole industry is experiencing the hit as well.

ENXTPA:SK Income Statement, June 14th 2019
ENXTPA:SK Income Statement, June 14th 2019

In terms of returns from investment, SEB has invested its equity funds well leading to a 20% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 6.1% exceeds the FR Consumer Durables industry of 5.0%, indicating SEB has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for SEB’s debt level, has increased over the past 3 years from 13% to 14%.

What does this mean?

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

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