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Examining how United States Lime & Minerals Inc (NASDAQ:USLM) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how United States Lime & Minerals is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its basic materials industry peers. See our latest analysis for United States Lime & Minerals
Did USLM beat its long-term earnings growth trend and its industry?
For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method enables me to assess many different companies in a uniform manner using the most relevant data points. For United States Lime & Minerals, its latest trailing-twelve-month earnings is US$27.15M, which, against the prior year’s level, has escalated by an impressive 52.91%. Since these values are fairly short-term thinking, I’ve determined an annualized five-year value for United States Lime & Minerals’s net income, which stands at US$17.68M This suggests that, on average, United States Lime & Minerals has been able to consistently grow its net income over the last few years as well.
How has it been able to do this? Well, let’s take a look at whether it is solely owing to an industry uplift, or if United States Lime & Minerals has experienced some company-specific growth. In the last couple of years, United States Lime & Minerals top-line expansion has overtaken earnings and the growth rate of expenses. Though this has caused a margin contraction, it has moderated United States Lime & Minerals’s earnings contraction. Scanning growth from a sector-level, the US basic materials industry has been enduring some headwinds over the prior year, leading to an average earnings drop of -4.19%. This is a significant change, given that the industry has been delivering a positive rate of 8.49%, on average, over the previous five years. This means that whatever recent headwind the industry is experiencing, United States Lime & Minerals is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research United States Lime & Minerals to get a more holistic view of the stock by looking at: