Dollar Tree (NASDAQ:DLTR) has had a rough three months with its share price down 10%. However, stock prices are usually driven by a company's financial performance over the long term, which in this case looks quite promising. Particularly, we will be paying attention to Dollar Tree's ROE today.
Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
Check out our latest analysis for Dollar Tree
How Is ROE Calculated?
ROE can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Dollar Tree is:
19% = US$1.6b ÷ US$8.4b (Based on the trailing twelve months to July 2022).
The 'return' is the amount earned after tax over the last twelve months. That means that for every $1 worth of shareholders' equity, the company generated $0.19 in profit.
What Has ROE Got To Do With Earnings Growth?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.
A Side By Side comparison of Dollar Tree's Earnings Growth And 19% ROE
To start with, Dollar Tree's ROE looks acceptable. Even so, when compared with the average industry ROE of 34%, we aren't very excited. However, the moderate 11% net income growth seen by Dollar Tree over the past five years is definitely a positive. Therefore, the growth in earnings could probably have been caused by other variables. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. Bear in mind, the company does have a respectable level of ROE. It is just that the industry ROE is higher. So this also provides some context to the earnings growth seen by the company.
Next, on comparing Dollar Tree's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 11% in the same period.
NasdaqGS:DLTR Past Earnings Growth September 26th 2022
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. Has the market priced in the future outlook for DLTR? You can find out in our latest intrinsic value infographic research report.
Is Dollar Tree Making Efficient Use Of Its Profits?
Dollar Tree doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the decent earnings growth number that we discussed above.
Conclusion
In total, we are pretty happy with Dollar Tree's performance. Specifically, we like that it has been reinvesting a high portion of its profits at a moderate rate of return, resulting in earnings expansion. We also studied the latest analyst forecasts and found that the company's earnings growth is expected be similar to its current growth rate. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
纳斯达克(DLTR)经历了艰难的三个月,股价下跌了10%。然而,股价通常是由一家公司的长期财务表现推动的,在这种情况下,这看起来相当有希望。特别是,我们今天将关注Dollar Tree的ROE。
股本回报率或净资产收益率是股东要考虑的一个重要因素,因为它告诉他们他们的资本再投资的效率。简而言之,净资产收益率显示了每一美元相对于其股东投资产生的利润。
查看我们对美元树的最新分析
净资产收益率是如何计算的?
可使用以下公式计算净资产收益率:
股本回报率=(持续经营的)净利润?股东权益
因此,根据上述公式,美元树的净资产收益率为:
19%=16亿美元×84亿美元(基于截至2022年7月的12个月的往绩)。
“报税表”是过去12个月的税后收入。这意味着,股东权益每增加1美元,公司就会产生0.19美元的利润。
净资产收益率与盈利增长有什么关系?
到目前为止,我们已经了解到净资产收益率衡量的是一家公司创造利润的效率。根据公司选择再投资或“保留”多少利润,我们就能够评估一家公司未来产生利润的能力。假设其他条件相同,与没有相同特征的公司相比,拥有更高股本回报率和更高利润保留率的公司通常会有更高的增长率。
美元树盈利增长与19%净资产收益率的并列比较
首先,Dollar Tree的净资产收益率看起来还可以接受。即便如此,与34%的行业平均ROE相比,我们并不是很兴奋。然而,Dollar Tree在过去五年中看到的11%的适度净收入增长肯定是积极的。因此,收益的增长可能是由其他变量造成的。例如,公司管理层可能做出了一些良好的战略决策,或者公司的派息率较低。请记住,该公司确实有相当高的净资产收益率水平。只是行业的净资产收益率更高。因此,这也为该公司看到的收益增长提供了一些背景。
接下来,对比美元树的净收入增长与行业,我们发现,该公司公布的增长与同期11%的行业平均增长率相似。
NasdaqGS:DLTR过去的收益增长2022年9月26日
赋予一家公司价值的基础在很大程度上与其盈利增长挂钩。投资者应该尝试确定预期的收益增长或下降是否已计入价格,无论是哪种情况。这样做将有助于他们确定该股的未来看起来是光明的还是不祥的。市场是否已经消化了DLTR的未来前景?你可以在我们最新的内在价值信息图研究报告中找到答案。
美元树是否有效地利用了它的利润?
美元树目前不支付任何股息,这实质上意味着它一直在将所有利润再投资于该业务。这无疑有助于我们上面讨论的可观的收益增长数字。
结论
总体而言,我们对Dollar Tree的表现相当满意。具体地说,我们喜欢它一直在以适度的回报率将高比例利润进行再投资,导致收益扩大。我们还研究了最新的分析师预测,发现该公司的收益增长预计将与目前的增长速度相似。要了解更多有关该公司未来收益增长预测的信息,请查看以下内容免费报告分析师对该公司的预测,以了解更多信息。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。