It is hard to get excited after looking at Scholastic's (NASDAQ:SCHL) recent performance, when its stock has declined 22% over the past three months. However, stock prices are usually driven by a company's financials over the long term, which in this case look pretty respectable. Particularly, we will be paying attention to Scholastic's ROE today.
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
See our latest analysis for Scholastic
How Is ROE Calculated?
The formula for return on equity is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Scholastic is:
5.1% = US$60m ÷ US$1.2b (Based on the trailing twelve months to August 2022).
The 'return' is the profit over the last twelve months. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.05.
Why Is ROE Important For Earnings Growth?
So far, we've learned that ROE is a measure of a company's profitability. 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 Scholastic's Earnings Growth And 5.1% ROE
At first glance, Scholastic's ROE doesn't look very promising. Next, when compared to the average industry ROE of 14%, the company's ROE leaves us feeling even less enthusiastic. Scholastic was still able to see a decent net income growth of 16% over the past five years. So, there might be other aspects that are positively influencing the company's earnings growth. Such as - high earnings retention or an efficient management in place.
We then compared Scholastic's net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 3.9% in the same period.
NasdaqGS:SCHL Past Earnings Growth October 24th 2022
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is Scholastic fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Scholastic Making Efficient Use Of Its Profits?
Scholastic has a healthy combination of a moderate three-year median payout ratio of 26% (or a retention ratio of 74%) and a respectable amount of growth in earnings as we saw above, meaning that the company has been making efficient use of its profits.
Additionally, Scholastic has paid dividends over a period of at least ten years which means that the company is pretty serious about sharing its profits with shareholders.
Conclusion
On the whole, we do feel that Scholastic has some positive attributes. Even in spite of the low rate of return, the company has posted impressive earnings growth as a result of reinvesting heavily into its business. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. You can see the 1 risk we have identified for Scholastic by visiting our risks dashboard for free on our platform here.
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看到纳斯达克(Scholastic)(股票代码：SCCL)最近的表现，很难感到兴奋，其股价在过去三个月里下跌了22%。然而，股价通常是由公司的长期财务状况推动的，在这种情况下，财务状况看起来相当不错。特别是，我们今天将关注Scholastic的净资产收益率(ROE)。
净资产收益率，即股本回报率，是评估一家公司从股东那里获得投资回报的有效程度的有用工具。简而言之，它是用来评估一家公司相对于其权益资本的盈利能力。
查看我们对Scholastic的最新分析
净资产收益率是如何计算的？
这个股本回报率公式是：
股本回报率=(持续经营的)净利润？股东权益
因此，根据上面的公式，学术公司的净资产收益率为：
5.1%=6000万美元×12亿美元(基于截至2022年8月的12个月的往绩)。
“收益”是过去12个月的利润。因此，这意味着股东每投资1美元，公司就会产生0.05美元的利润。
为什么净资产收益率对收益增长很重要？
到目前为止，我们了解到净资产收益率是衡量一家公司盈利能力的指标。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。
Scholastic盈利增长与5.1%净资产收益率的并列比较
乍一看，Scholastic的净资产收益率看起来并不是很有希望。其次，与14%的行业平均净资产收益率相比，该公司的净资产收益率让我们感到更不热情。在过去的五年里，Scholastic仍然能够看到16%的可观的净收入增长。因此，可能还有其他方面正在积极影响公司的收益增长。例如-高收益留存或有效的管理到位。
然后，我们将Scholastic的净收入增长与行业进行了比较，我们很高兴地看到，与同期3.9%的行业增长率相比，该公司的增长数字更高。
NasdaqGS：Schl过去的收益增长2022年10月24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。对于投资者来说，重要的是知道市场是否已经消化了公司预期的收益增长(或下降)。通过这样做，他们将知道股票是将进入清澈的蓝色水域，还是等待沼泽水域。与其他公司相比，学术公司的价值是否公平？这3个估值指标可能会帮助你做出决定。
学术集团是否有效地利用了利润？
正如我们上面看到的，Scholastic拥有26%的适度三年中值派息率(或74%的留存率)和可观的收益增长的健康组合，这意味着该公司一直在有效地利用其利润。
此外，Scholastic在至少十年的时间里支付了股息，这意味着该公司非常认真地与股东分享利润。
结论
总体而言，我们确实觉得Scholastic有一些积极的属性。尽管回报率很低，但由于对业务进行了大量再投资，该公司实现了令人印象深刻的收益增长。虽然我们不会完全解雇这家公司，但我们要做的是努力确定这项业务在公司周围做出更明智的决定的风险有多大。您可以通过访问我们的风险控制面板在我们的平台上是免费的。
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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。
