Yahoo Finance How Does Coca-Cola HBC AG's (LON:CCH) Earnings Growth Stack Up Against Industry Performance?
After reading Coca-Cola HBC AG's (LSE:CCH) most recent earnings announcement (31 December 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
View our latest analysis for Coca-Cola HBC
Did CCH beat its long-term earnings growth trend and its industry?
CCH's trailing twelve-month earnings (from 31 December 2019) of €488m has increased by 9.0% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 10%, indicating the rate at which CCH is growing has slowed down. To understand what's happening, let’s take a look at what’s transpiring with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Coca-Cola HBC has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 6.8% exceeds the GB Beverage industry of 5.9%, indicating Coca-Cola HBC has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Coca-Cola HBC’s debt level, has increased over the past 3 years from 12% to 14%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Coca-Cola HBC gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Coca-Cola HBC to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for CCH’s future growth? Take a look at our free research report of analyst consensus for CCH’s outlook.
Financial Health: Are CCH’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.
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 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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