Understanding how Kuehne + Nagel International AG (VTX:KNIN) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Kuehne + Nagel International is doing by comparing its latest earnings with its long-term trend as well as the performance of its shipping industry peers.
See our latest analysis for Kuehne + Nagel International
Did KNIN perform better than its track record and industry?
KNIN's trailing twelve-month earnings (from 30 June 2019) of CHF763m has declined by -1.0% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 4.6%, indicating the rate at which KNIN is growing has slowed down. What could be happening here? Let's examine what's transpiring with margins and if the whole industry is experiencing the hit as well.
In terms of returns from investment, Kuehne + Nagel International has invested its equity funds well leading to a 40% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 8.1% exceeds the CH Shipping industry of 5.1%, indicating Kuehne + Nagel International has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Kuehne + Nagel International’s debt level, has declined over the past 3 years from 36% to 22%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.6% to 41% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I suggest you continue to research Kuehne + Nagel International to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for KNIN’s future growth? Take a look at our free research report of analyst consensus for KNIN’s outlook.
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Financial Health: Are KNIN’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.
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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.