Analyzing UmweltBank AG’s (XTRA:UBK) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess UBK’s recent performance announced on 31 December 2016 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for UmweltBank

Could UBK beat the long-term trend and outperform its industry?

I prefer to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to examine different companies on a similar basis, using the most relevant data points. For UmweltBank, its most recent earnings (trailing twelve month) is €16.15M, which compared to the previous year’s level, has risen by a somewhat subdued 3.63%. Given that these values may be relatively myopic, I’ve computed an annualized five-year value for UmweltBank’s earnings, which stands at €13.80M This shows that, on average, UmweltBank has been able to increasingly improve its earnings over the past couple of years as well.

What’s the driver of this growth? Let’s see whether it is solely because of an industry uplift, or if UmweltBank has experienced some company-specific growth. The hike in earnings seems to be supported by a substantial top-line increase beating its growth rate of costs. Though this has led to a margin contraction, it has made UmweltBank more profitable. Inspecting growth from a sector-level, the DE banks industry has been growing, albeit, at a unexciting single-digit rate of 4.21% in the past year, and 6.59% over the previous five years. This shows that whatever near-term headwind the industry is experiencing, it’s hitting UmweltBank harder than its peers.

What does this mean?

Though UmweltBank’s past data is helpful, it is only one aspect of my investment thesis. 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 UmweltBank to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is UBK’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.

• 2. Valuation: What is UBK worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether UBK is currently mispriced by the market.

• 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 2016. 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.