Yahoo Finance Meggitt PLC (LON:MGGT): Has Recent Earnings Growth Beaten Long-Term Trend?
Assessing Meggitt PLC's (LSE:MGGT) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess MGGT's recent performance announced on 31 December 2019 and evaluate these figures to its longer term trend and industry movements.
See our latest analysis for Meggitt
How MGGT fared against its long-term earnings performance and its industry
MGGT's trailing twelve-month earnings (from 31 December 2019) of UK£223m has jumped 24% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 3.2%, indicating the rate at which MGGT is growing has accelerated. What's enabled this growth? Well, let’s take a look at if it is merely due to an industry uplift, or if Meggitt has experienced some company-specific growth.
In terms of returns from investment, Meggitt has fallen short of achieving a 20% return on equity (ROE), recording 9.1% instead. Furthermore, its return on assets (ROA) of 5.4% is below the GB Aerospace & Defense industry of 5.6%, indicating Meggitt's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Meggitt’s debt level, has increased over the past 3 years from 5.8% to 9.0%.
What does this mean?
Though Meggitt'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? I suggest you continue to research Meggitt to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for MGGT’s future growth? Take a look at our free research report of analyst consensus for MGGT’s outlook.
Financial Health: Are MGGT’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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