For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Miton Group plc’s (LON:MGR) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
How Did MGR’s Recent Performance Stack Up Against Its Past?MGR’s trailing twelve-month earnings (from 31 December 2017) of UK£5.01m has jumped 54.10% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 28.64%, indicating the rate at which MGR is growing has accelerated. What’s the driver of this growth? Let’s take a look at if it is solely owing to industry tailwinds, or if Miton Group has seen some company-specific growth.
In the last few years, Miton Group expanded its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Viewing growth from a sector-level, the UK capital markets industry has been growing its average earnings by double-digit 26.89% in the prior twelve months, and 17.82% over the past half a decade. This growth is a median of profitable companies of 25 Capital Markets companies in GB including Caledonia Investments, Blackstone / GSO Loan Financing and Rights and Issues Investment Trust. This means whatever tailwind the industry is benefiting from, Miton Group is able to leverage this to its advantage.In terms of returns from investment, Miton Group has not invested its equity funds well, leading to a 8.43% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 7.73% is below the GB Capital Markets industry of 7.94%, indicating Miton Group’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Miton Group’s debt level, has increased over the past 3 years from 6.74% to 11.28%.
What does this mean?
Though Miton Group’s past data is helpful, it is only one aspect of my investment thesis. While Miton Group 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 Miton Group to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MGR’s future growth? Take a look at our free research report of analyst consensus for MGR’s outlook.
- Financial Health: Is MGR’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.
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 email@example.com.