Yahoo Finance Want To Invest In Ryman Healthcare Limited (NZSE:RYM)? Here’s How It Performed Lately
When Ryman Healthcare Limited (NZSE:RYM) released its most recent earnings update (31 March 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Ryman Healthcare 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 RYM has performed.
View our latest analysis for Ryman Healthcare
Were RYM’s earnings stronger than its past performances and the industry?
RYM’s trailing twelve-month earnings (from 31 March 2018) of NZ$388m has increased by 8.8% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 20%, indicating the rate at which RYM is growing has slowed down. To understand what’s happening, let’s take a look at what’s transpiring with margins and if the entire industry is feeling the heat.
In terms of returns from investment, Ryman Healthcare has invested its equity funds well leading to a 20% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 7.0% exceeds the NZ Healthcare industry of 5.3%, indicating Ryman Healthcare has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Ryman Healthcare’s debt level, has declined over the past 3 years from 0.8% to 0.7%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 32% to 55% over the past 5 years.
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 Ryman Healthcare gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Ryman Healthcare to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for RYM’s future growth? Take a look at our free research report of analyst consensus for RYM’s outlook.
Financial Health: Are RYM’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 March 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
