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Examining RATIONAL Aktiengesellschaft's (ETR:RAA) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess RAA's latest performance announced on 31 March 2019 and compare these figures to its longer term trend and industry movements.
See our latest analysis for RATIONAL
Did RAA beat its long-term earnings growth trend and its industry?
RAA's trailing twelve-month earnings (from 31 March 2019) of €163m has jumped 16% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 8.7%, indicating the rate at which RAA is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is solely attributable to industry tailwinds, or if RATIONAL has seen some company-specific growth.
In terms of returns from investment, RATIONAL has invested its equity funds well leading to a 33% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 25% exceeds the DE Machinery industry of 5.3%, indicating RATIONAL has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for RATIONAL’s debt level, has increased over the past 3 years from 38% to 40%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 12% to 2.2% over the past 5 years.
What does this mean?
RATIONAL'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 RATIONAL gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research RATIONAL to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for RAA’s future growth? Take a look at our free research report of analyst consensus for RAA’s outlook.
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Financial Health: Are RAA’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.
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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.