ComfortDelGro (SGX:C52) has had a rough month with its share price down 4.2%. We decided to study the company's financials to determine if the downtrend will continue as the long-term performance of a company usually dictates market outcomes. Particularly, we will be paying attention to ComfortDelGro'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. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
Check out our latest analysis for ComfortDelGro
How To Calculate Return On Equity?
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 ComfortDelGro is:
6.1% = S$192m ÷ S$3.1b (Based on the trailing twelve months to June 2022).
The 'return' refers to a company's earnings over the last year. So, this means that for every SGD1 of its shareholder's investments, the company generates a profit of SGD0.06.
What Is The Relationship Between ROE And Earnings Growth?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
ComfortDelGro's Earnings Growth And 6.1% ROE
When you first look at it, ComfortDelGro's ROE doesn't look that attractive. However, its ROE is similar to the industry average of 6.6%, so we won't completely dismiss the company. Having said that, ComfortDelGro's five year net income decline rate was 22%. Remember, the company's ROE is a bit low to begin with. Hence, this goes some way in explaining the shrinking earnings.
However, when we compared ComfortDelGro's growth with the industry we found that while the company's earnings have been shrinking, the industry has seen an earnings growth of 3.1% in the same period. This is quite worrisome.
SGX:C52 Past Earnings Growth September 26th 2022
Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. Is ComfortDelGro fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is ComfortDelGro Making Efficient Use Of Its Profits?
ComfortDelGro has a high three-year median payout ratio of 70% (that is, it is retaining 30% of its profits). This suggests that the company is paying most of its profits as dividends to its shareholders. This goes some way in explaining why its earnings have been shrinking. With only a little being reinvested into the business, earnings growth would obviously be low or non-existent. To know the 2 risks we have identified for ComfortDelGro visit our risks dashboard for free.
Moreover, ComfortDelGro has been paying dividends for at least ten years or more suggesting that management must have perceived that the shareholders prefer dividends over earnings growth. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 71%. However, ComfortDelGro's ROE is predicted to rise to 8.1% despite there being no anticipated change in its payout ratio.
Summary
In total, we would have a hard think before deciding on any investment action concerning ComfortDelGro. The company has seen a lack of earnings growth as a result of retaining very little profits and whatever little it does retain, is being reinvested at a very low rate of return. With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
ComfortDelGro(SGX:C52)經歷了艱難的一個月,股價下跌4.2%。我們決定研究公司的財務狀況,以確定下降趨勢是否會繼續下去,因為公司的長期表現通常決定着市場結果。特別是,我們今天將關注ComfortDelGro的淨資產收益率。
淨資產收益率,即股本回報率,是評估一家公司從股東那裏獲得投資回報的有效程度的有用工具。簡而言之,淨資產收益率顯示了每一美元相對於其股東投資產生的利潤。
查看我們對ComfortDelGro的最新分析
如何計算股本回報率?
可使用以下公式計算淨資產收益率:
股本回報率=(持續經營的)淨利潤?股東權益
因此,根據上面的公式,ComfortDelGro的ROE為:
6.1%=1.92億新元?31億新元(基於截至2022年6月的12個月)。
“回報”指的是一家公司過去一年的收益。因此,這意味着股東每投資1新元,公司就會產生0.06新元的利潤。
淨資產收益率與盈利增長之間有什麼關係?
到目前為止,我們已經瞭解到淨資產收益率衡量的是一家公司創造利潤的效率。根據公司將這些利潤再投資或“保留”多少,以及這樣做的效率如何,我們就能夠評估一家公司的收益增長潛力。一般來説,在其他條件相同的情況下,股本回報率和利潤留存較高的公司比不具備這些特徵的公司有更高的增長率。
ComfortDelGro的收益增長和6.1%的淨資產收益率
當你第一次看到它時,ComfortDelGro的ROE看起來並不那麼吸引人。不過,其淨資產收益率接近6.6%的行業平均水平,因此我們不會完全對該公司不屑一顧。話雖如此,ComfortDelGro的五年淨收入降幅為22%。請記住,該公司的淨資產收益率從一開始就有點低。因此,這在一定程度上解釋了收益縮水的原因。
然而,當我們將ComfortDelGro的增長與行業進行比較時發現,儘管該公司的收益一直在萎縮,但同期該行業的收益增長了3.1%。這相當令人擔憂。
新交所:C52過去的收益增長2022年9月26日
盈利增長是股票估值的一個重要因素。投資者下一步需要確定的是,預期的收益增長是否已經計入了股價。這樣做將有助於他們確定該股的未來看起來是光明的還是不祥的。與其他公司相比,ComfortDelGro的估值是否公平?這3個估值指標可能會幫助你做出決定。
ComfortDelGro是否有效地利用了其利潤?
ComfortDelGro的三年平均派息率高達70%(也就是説,它保留了30%的利潤)。這表明該公司正在將大部分利潤作為股息支付給股東。這在一定程度上解釋了為什麼它的收益一直在縮水。由於只有一小部分再投資於該業務,盈利增長顯然會很低或根本不存在。要了解我們為ComfortDelGro確定的兩個風險,請免費訪問我們的風險儀錶板。
此外,ComfortDelGro至少在十年或更長時間內一直在支付股息,這表明管理層肯定已經意識到,股東更喜歡股息,而不是收益增長。我們最新的分析師數據顯示,該公司未來三年的派息率預計約為71%。然而,ComfortDelGro的淨資產收益率預計將上升至8.1%,儘管其派息率沒有預期的變化。
摘要
總而言之,在決定與ComfortDelGro有關的任何投資行動之前,我們會三思而後行。由於保留了很少的利潤,該公司的收益增長乏力,而且無論它保留的是什麼,再投資的回報率都非常低。話雖如此,我們研究了最新的分析師預測,發現儘管該公司過去的收益有所縮水,但分析師預計其未來的收益將會增長。要了解更多有關該公司未來收益增長預測的信息,請查看以下內容免費報告分析師對該公司的預測,以瞭解更多信息。
對這篇文章有什麼反饋嗎?擔心內容嗎? 保持聯繫直接與我們聯繫。或者,也可以給編輯組發電子郵件,地址是implywallst.com。
本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。