Did Regal Beloit Corporation's (NYSE:RBC) Recent Earnings Growth Beat The Trend?
Assessing Regal Beloit Corporation's (NYSE:RBC) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess RBC's recent performance announced on 28 December 2019 and evaluate these figures to its long-term trend and industry movements.
Check out our latest analysis for Regal Beloit
Did RBC beat its long-term earnings growth trend and its industry?
RBC's trailing twelve-month earnings (from 28 December 2019) of US$239m has increased by 3.4% 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 27%, indicating the rate at which RBC 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 feeling the heat.
In terms of returns from investment, Regal Beloit has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. Furthermore, its return on assets (ROA) of 6.5% is below the US Electrical industry of 6.7%, indicating Regal Beloit's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Regal Beloit’s debt level, has increased over the past 3 years from 8.8% to 9.3%.
What does this mean?
Regal Beloit'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? I recommend you continue to research Regal Beloit to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for RBC’s future growth? Take a look at our free research report of analyst consensus for RBC’s outlook.
Financial Health: Are RBC’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 28 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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