When Martin Midstream Partners LP. (NASDAQ:MMLP) announced its most recent earnings (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Martin Midstream Partners has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see MMLP has performed. View our latest analysis for Martin Midstream Partners
Could MMLP beat the long-term trend and outperform its industry?
I like to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to examine various companies in a uniform manner using new information. For Martin Midstream Partners, its latest earnings (trailing twelve month) is US$15.79M, which, in comparison to the prior year’s figure, has jumped by a non-trivial 86.39%. Since these figures are somewhat short-term, I’ve computed an annualized five-year figure for Martin Midstream Partners’s earnings, which stands at US$9.60M This means that, generally, Martin Midstream Partners has been able to increasingly raise its net income over the past couple of years as well.How has it been able to do this? Let’s see whether it is only owing to industry tailwinds, or if Martin Midstream Partners has experienced some company-specific growth. Over the past couple of years, Martin Midstream Partners expanded bottom-line, while its top-line declined, by efficiently controlling its costs. This resulted in to a margin expansion and profitability over time. Viewing growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 18.75% over the previous year, . This is a turnaround from a volatile drop of -7.52% in the last few years. This suggests that, in the recent industry expansion, Martin Midstream Partners is capable of amplifying this to its advantage.
What does this mean?
Though Martin Midstream Partners’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Martin Midstream Partners gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Martin Midstream Partners to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for MMLP’s future growth? Take a look at our free research report of analyst consensus for MMLP’s outlook.
- 2. Financial Health: Is MMLP’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.