When Natural Resource Partners LP.’s (NYSE:NRP) announced its latest earnings (31 March 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Natural Resource Partners’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not NRP actually performed well. Below is a quick commentary on how I see NRP has performed. Check out our latest analysis for Natural Resource Partners
Did NRP’s recent earnings growth beat the long-term trend and the industry?
I prefer to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to analyze many different companies in a uniform manner using new information. For Natural Resource Partners, its most recent earnings (trailing twelve month) is US$77.10M, which, in comparison to the prior year’s figure, has risen by a somewhat unexciting 8.27%. Since these figures are somewhat short-term thinking, I have estimated an annualized five-year figure for NRP’s net income, which stands at US$61.69M This suggests that, generally, Natural Resource Partners has been able to steadily grow its profits over the last few years as well.What’s enabled this growth? Let’s see whether it is solely due to an industry uplift, or if Natural Resource Partners has seen some company-specific growth. Even though both top-line and bottom-line growth rates in the past couple of years, were, on average, negative, earnings were more so. While this resulted in a margin contraction, it has lessened Natural Resource Partners’s earnings contraction. Scanning growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 25.50% over the previous year, . This is a turnaround from a volatile drop of -5.35% in the past few years. This suggests that, in the recent industry expansion, Natural Resource Partners has not been able to realize the gains unlike its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Natural Resource Partners gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Natural Resource Partners to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for NRP’s future growth? Take a look at our free research report of analyst consensus for NRP’s outlook.
- Financial Health: Is NRP’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.