Assessing Middlesex Water Company’s (NASDAQ:MSEX) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess MSEX’s recent performance announced on 31 December 2018 and evaluate these figures to its longer term trend and industry movements.
Were MSEX’s earnings stronger than its past performances and the industry?
MSEX’s trailing twelve-month earnings (from 31 December 2018) of US$32m has jumped 43% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 11%, indicating the rate at which MSEX is growing has accelerated. What’s enabled this growth? Let’s take a look at if it is merely because of industry tailwinds, or if Middlesex Water has experienced some company-specific growth.
In terms of returns from investment, Middlesex Water has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 5.1% exceeds the US Water Utilities industry of 3.9%, indicating Middlesex Water has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Middlesex Water’s debt level, has declined over the past 3 years from 6.5% to 5.1%.
What does this mean?
Middlesex Water’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Middlesex Water gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Middlesex Water to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MSEX’s future growth? Take a look at our free research report of analyst consensus for MSEX’s outlook.
- Financial Health: Are MSEX’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 December 2018. 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.