Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Fastenal Company's (NasdaqGS:FAST) 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.
Check out our latest analysis for Fastenal
Did FAST's recent earnings growth beat the long-term trend and the industry?
FAST's trailing twelve-month earnings (from 30 September 2019) of US$781m has increased by 6.2% 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 11%, indicating the rate at which FAST is growing has slowed down. Why could this be happening? Well, let's examine what's occurring with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Fastenal has invested its equity funds well leading to a 30% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 21% exceeds the US Trade Distributors industry of 6.4%, indicating Fastenal has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Fastenal’s debt level, has declined over the past 3 years from 33% to 32%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 5.5% to 17% over the past 5 years.
What does this mean?
While past data is useful, it 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 Fastenal to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FAST’s future growth? Take a look at our free research report of analyst consensus for FAST’s outlook.
- Financial Health: Are FAST’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 September 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.
"fast" - Google News
October 29, 2019 at 06:59PM
https://ift.tt/2Jt2wfB
Did Fastenal Company's (NASDAQ:FAST) Recent Earnings Growth Beat The Trend? - Yahoo Finance
"fast" - Google News
https://ift.tt/2VRmxBz
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
No comments:
Post a Comment