For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Mayr-Melnhof Karton AG’s (WBAG:MMK) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for Mayr-Melnhof Karton

Have MMK’s earnings improved against past performances and the industry?

To account for any quarterly or half-yearly updates, I 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 allows me to examine different stocks on a more comparable basis, using new information. For Mayr-Melnhof Karton, its latest earnings (trailing twelve month) is €151.08M, which compared to the previous year’s figure, Since these figures are relatively myopic, I have computed an annualized five-year figure for MMK’s net income, which stands at €130.89M This means on average, Mayr-Melnhof Karton has been able to grow its earnings over the past couple of years.

What’s enabled this growth? Well, let’s take a look at whether it is only because of industry tailwinds, or if Mayr-Melnhof Karton has experienced some company-specific growth. Over the past few years, Mayr-Melnhof Karton increased its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the AT packaging industry has been growing its average earnings by double-digit 10.89% in the previous twelve months, and a less exciting 6.80% over the past five. This suggests that whatever tailwind the industry is deriving benefit from, Mayr-Melnhof Karton has not been able to gain as much as its industry peers.

What does this mean?

Mayr-Melnhof Karton’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Mayr-Melnhof Karton has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Mayr-Melnhof Karton to get a better picture of the stock by looking at:

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

• 2. Financial Health: Is MMK’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 30 September 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.