Yahoo Finance Want To Invest In Prudential plc (LON:PRU)? Here's How It Performed Lately
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Prudential plc's (LSE:PRU) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
See our latest analysis for Prudential
Commentary On PRU's Past Performance
PRU's trailing twelve-month earnings (from 30 June 2019) of UK£2.6b has jumped 22% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 3.9%, indicating the rate at which PRU is growing has accelerated. What's the driver of this growth? Well, let’s take a look at whether it is solely a result of industry tailwinds, or if Prudential has seen some company-specific growth.
In terms of returns from investment, Prudential has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. Furthermore, its return on assets (ROA) of 0.6% is below the GB Insurance industry of 1.4%, indicating Prudential's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Prudential’s debt level, has increased over the past 3 years from 0.6% to 0.9%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 93% to 79% over the past 5 years.
What does this mean?
Though Prudential'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 Prudential to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for PRU’s future growth? Take a look at our free research report of analyst consensus for PRU’s outlook.
Financial Health: Are PRU’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 30 June 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.
