Yahoo Finance Has Toll Brothers, Inc. (NYSE:TOL) Improved Earnings Growth In Recent Times?
Investors with a long-term horizong may find it valuable to assess Toll Brothers, Inc.'s (NYSE:TOL) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Toll Brothers is currently performing.
View our latest analysis for Toll Brothers
Did TOL's recent earnings growth beat the long-term trend and the industry?
TOL's trailing twelve-month earnings (from 31 July 2019) of US$699m has jumped 11% 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 19%, indicating the rate at which TOL is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Toll Brothers has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 6.5% is below the US Consumer Durables industry of 6.6%, indicating Toll Brothers's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Toll Brothers’s debt level, has increased over the past 3 years from 6.8% to 9.2%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 89% to 75% over the past 5 years.
What does this mean?
Toll Brothers's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. 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 Toll Brothers to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TOL’s future growth? Take a look at our free research report of analyst consensus for TOL’s outlook.
Financial Health: Are TOL’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 July 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
