Yahoo Finance Interested In Spirax-Sarco Engineering plc (LON:SPX)? Here's What Its Recent Performance Looks Like
Assessing Spirax-Sarco Engineering plc's (LON:SPX) performance as a company requires looking at more than just a years' earnings data. Below, I will run you through a simple sense check to build perspective on how Spirax-Sarco Engineering is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its machinery industry peers.
View our latest analysis for Spirax-Sarco Engineering
Could SPX beat the long-term trend and outperform its industry?
SPX's trailing twelve-month earnings (from 31 December 2018) of UK£223m has jumped 42% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 16%, indicating the rate at which SPX is growing has accelerated. What's the driver of this growth? Let's see if it is merely a result of industry tailwinds, or if Spirax-Sarco Engineering has experienced some company-specific growth.
In terms of returns from investment, Spirax-Sarco Engineering has invested its equity funds well leading to a 29% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 15% exceeds the GB Machinery industry of 7.3%, indicating Spirax-Sarco Engineering has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Spirax-Sarco Engineering’s debt level, has declined over the past 3 years from 25% to 23%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 25% to 55% over the past 5 years.
What does this mean?
Though Spirax-Sarco Engineering's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Spirax-Sarco Engineering gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Spirax-Sarco Engineering to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for SPX’s future growth? Take a look at our free research report of analyst consensus for SPX’s outlook.
Financial Health: Are SPX’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 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.
