Did Core-Mark Holding Company, Inc.’s (NASDAQ:CORE) Recent Earnings Growth Beat The Trend?

When Core-Mark Holding Company, Inc. (NASDAQ:CORE) released its most recent earnings update (31 December 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Core-Mark Holding Company performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see CORE has performed.

Check out our latest analysis for Core-Mark Holding Company

Could CORE beat the long-term trend and outperform its industry?

CORE’s trailing twelve-month earnings (from 31 December 2018) of US$46m has jumped 36% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -2.0%, indicating the rate at which CORE is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is only owing to an industry uplift, or if Core-Mark Holding Company has seen some company-specific growth.

NasdaqGS:CORE Income Statement, March 3rd 2019
NasdaqGS:CORE Income Statement, March 3rd 2019

In terms of returns from investment, Core-Mark Holding Company has fallen short of achieving a 20% return on equity (ROE), recording 8.0% instead. Furthermore, its return on assets (ROA) of 3.6% is below the US Retail Distributors industry of 7.1%, indicating Core-Mark Holding Company’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Core-Mark Holding Company’s debt level, has declined over the past 3 years from 14% to 7.3%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 19% to 70% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Core-Mark Holding Company to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for CORE’s future growth? Take a look at our free research report of analyst consensus for CORE’s outlook.
  2. Financial Health: Are CORE’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.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.

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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.