In This Article:
For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on CTT - Correios De Portugal, S.A. (ENXTLS:CTT) useful as an attempt to give more color around how CTT - Correios De Portugal is currently performing.
See our latest analysis for CTT - Correios De Portugal
Did CTT's recent earnings growth beat the long-term trend and the industry?
CTT's trailing twelve-month earnings (from 30 June 2019) of €21m has jumped 25% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -28%, indicating the rate at which CTT is growing has accelerated. What's enabled this growth? Let's see if it is only because of industry tailwinds, or if CTT - Correios De Portugal has experienced some company-specific growth.
In terms of returns from investment, CTT - Correios De Portugal has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. Furthermore, its return on assets (ROA) of 1.0% is below the PT Logistics industry of 3.7%, indicating CTT - Correios De Portugal's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for CTT - Correios De Portugal’s debt level, has declined over the past 3 years from 16% to 9.6%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 1.5% to 125% over the past 5 years.
What does this mean?
CTT - Correios De Portugal's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. There may be variables that are influencing the entire industry hence the high industry growth rate over the same time frame. You should continue to research CTT - Correios De Portugal to get a better picture of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for CTT’s future growth? Take a look at our free research report of analyst consensus for CTT’s outlook.
-
Financial Health: Are CTT’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.