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Measuring Heineken NV.’s (ENXTAM:HEIA) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess HEIA’s recent performance announced on 31 December 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Heineken

How Well Did HEIA Perform?

I like to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to analyze many different companies on a more comparable basis, using the latest information. For Heineken, its latest trailing-twelve-month earnings is €1.94B, which compared to the previous year’s figure, has increased by 25.65%. Given that these figures are relatively short-term thinking, I have created an annualized five-year value for Heineken’s net income, which stands at €1.77B This shows that, generally, Heineken has been able to steadily grow its profits over the past few years as well.

What’s the driver of this growth? Let’s see if it is only attributable to industry tailwinds, or if Heineken has seen some company-specific growth. Over the past couple of years, Heineken top-line expansion has outpaced earnings and the growth rate of expenses. Though this has led to a margin contraction, it has moderated Heineken’s earnings contraction. Looking at growth from a sector-level, the NL beverage industry has been growing its average earnings by double-digit 25.42% in the past year, and a flatter 1.38% over the past five. This means that whatever tailwind the industry is profiting from, Heineken is capable of leveraging this to its advantage.

What does this mean?

Heineken’s track record can be a valuable insight into its earnings performance, but it certainly 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? You should continue to research Heineken to get a better picture of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for HEIA’s future growth? Take a look at our free research report of analyst consensus for HEIA’s outlook.

• 2. Financial Health: Is HEIA’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.

• 3. 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 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.