For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Croda International Plc’s (LON:CRDA) 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.
How Did CRDA’s Recent Performance Stack Up Against Its Past?
CRDA’s trailing twelve-month earnings (from 30 June 2018) of UK£244m has jumped 14% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 8.0%, indicating the rate at which CRDA is growing has accelerated. What’s enabled this growth? Let’s see whether it is solely owing to industry tailwinds, or if Croda International has experienced some company-specific growth.
In terms of returns from investment, Croda International has invested its equity funds well leading to a 27% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 14% exceeds the GB Chemicals industry of 7.5%, indicating Croda International has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Croda International’s debt level, has declined over the past 3 years from 27% to 22%.
What does this mean?
Though Croda International’s past data is helpful, it is only one aspect of my investment thesis. 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 Croda International to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CRDA’s future growth? Take a look at our free research report of analyst consensus for CRDA’s outlook.
- Financial Health: Are CRDA’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 email@example.com.