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Understanding how Procter & Gamble Hygiene and Health Care Limited (NSE:PGHH) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Procter & Gamble Hygiene and Health Care is doing by comparing its latest earnings with its long-term trend as well as the performance of its personal products industry peers.
Did PGHH’s recent earnings growth beat the long-term trend and the industry?
PGHH’s trailing twelve-month earnings (from 31 March 2019) of ₹4.0b has declined by -1.3% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.4%, indicating the rate at which PGHH is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s going on with margins and if the entire industry is feeling the heat.
In terms of returns from investment, Procter & Gamble Hygiene and Health Care has invested its equity funds well leading to a 44% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 21% exceeds the IN Personal Products industry of 17%, indicating Procter & Gamble Hygiene and Health Care has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Procter & Gamble Hygiene and Health Care’s debt level, has increased over the past 3 years from 39% to 62%.
What does this mean?
Though Procter & Gamble Hygiene and Health Care’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. I recommend you continue to research Procter & Gamble Hygiene and Health Care to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PGHH’s future growth? Take a look at our free research report of analyst consensus for PGHH’s outlook.
- Financial Health: Are PGHH’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 31 March 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 firstname.lastname@example.org. 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.