Understanding how Miramar Hotel and Investment Company, Limited (HKG:71) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Miramar Hotel and Investment Company is doing by comparing its latest earnings with its long-term trend as well as the performance of its hospitality industry peers.
See our latest analysis for Miramar Hotel and Investment Company
Commentary On 71’s Past Performance
71’s trailing twelve-month earnings (from 30 June 2018) of HK$1.6b has jumped 11% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 2.6%, indicating the rate at which 71 is growing has accelerated. How has it been able to do this? Let’s see whether it is merely a result of an industry uplift, or if Miramar Hotel and Investment Company has seen some company-specific growth.
In terms of returns from investment, Miramar Hotel and Investment Company has fallen short of achieving a 20% return on equity (ROE), recording 8.8% instead. However, its return on assets (ROA) of 7.9% exceeds the HK Hospitality industry of 3.9%, indicating Miramar Hotel and Investment Company has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Miramar Hotel and Investment Company’s debt level, has declined over the past 3 years from 5.5% to 5.2%.
What does this mean?
Though Miramar Hotel and Investment Company’s past data is helpful, it is only one aspect of my investment thesis. While Miramar Hotel and Investment Company has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Miramar Hotel and Investment Company to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for 71’s future growth? Take a look at our free research report of analyst consensus for 71’s outlook.
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Financial Health: Are 71’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.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.