Thursday, September 28, 2023
Market-Reporter
  • Home
  • Markets
    • U.S. Markets
    • Canada
    • Europe & Middle East
    • Emerging Markets
    • Asia
    • Latin America
  • Investing
    • Stocks
    • IPOs
    • Mutual Funds
    • ETFs
    • Bonds
    • Commodities
    • Currencies
    • Cryptocurrencies
  • Economy & Politics
    • Personal Finance
    • Spending & Saving
    • Retirement
    • Real Estate
No Result
View All Result
  • Home
  • Markets
    • U.S. Markets
    • Canada
    • Europe & Middle East
    • Emerging Markets
    • Asia
    • Latin America
  • Investing
    • Stocks
    • IPOs
    • Mutual Funds
    • ETFs
    • Bonds
    • Commodities
    • Currencies
    • Cryptocurrencies
  • Economy & Politics
    • Personal Finance
    • Spending & Saving
    • Retirement
    • Real Estate
No Result
View All Result
Market-Reporter
No Result
View All Result
Home Europe & Middle East

Is the Market Following Strong Financials?

MtR by MtR
July 25, 2021
in Europe & Middle East
0
Is the Market Following Strong Financials?


Most readers would already know that B&M European Value Retail’s (LON:BME) stock increased by 4.7% over the past month. Since the market usually pay for a company’s long-term financial health, we decided to study the company’s fundamentals to see if they could be influencing the market. Particularly, we will be paying attention to B&M European Value Retail’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 simpler terms, it measures the profitability of a company in relation to shareholder’s equity.

Check out our latest analysis for B&M European Value Retail

How To Calculate Return On Equity?

The formula for ROE is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity

So, based on the above formula, the ROE for B&M European Value Retail is:

58% = UK£428m ÷ UK£733m (Based on the trailing twelve months to March 2021).

The ‘return’ is the amount earned after tax over the last twelve months. So, this means that for every £1 of its shareholder’s investments, the company generates a profit of £0.58.

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.

B&M European Value Retail’s Earnings Growth And 58% ROE

Firstly, we acknowledge that B&M European Value Retail has a significantly high ROE. Secondly, even when compared to the industry average of 29% the company’s ROE is quite impressive. Under the circumstances, B&M European Value Retail’s considerable five year net income growth of 22% was to be expected.

When you consider the fact that the industry earnings have shrunk at a rate of 1.7% in the same period, the company’s net income growth is pretty remarkable.

past-earnings-growth

past-earnings-growth

The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is BME fairly valued? This infographic on the company’s intrinsic value has everything you need to know.

Is B&M European Value Retail Making Efficient Use Of Its Profits?

B&M European Value Retail has a three-year median payout ratio of 38% (where it is retaining 62% of its income) which is not too low or not too high. This suggests that its dividend is well covered, and given the high growth we discussed above, it looks like B&M European Value Retail is reinvesting its earnings efficiently.

Besides, B&M European Value Retail has been paying dividends over a period of seven years. This shows that the company is committed to sharing profits with its shareholders. Upon studying the latest analysts’ consensus data, we found that the company’s future payout ratio is expected to rise to 69% over the next three years. Regardless, the ROE is not expected to change much for the company despite the higher expected payout ratio.

Summary

In total, we are pretty happy with B&M European Value Retail’s performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. With that said, on studying the latest analyst forecasts, we found that while the company has seen growth in its past earnings, analysts expect its future earnings to shrink. 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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.



Source link

Related articles

GCC visa ‘on the table’ in bid to boost tourism – Middle East Monitor

GCC visa ‘on the table’ in bid to boost tourism – Middle East Monitor

September 28, 2023
Europe Medical Devices Market Report Size, Growth and Country-Specific Trends, 2023 to 2030 By Mobility Foresights

Europe Medical Devices Market Report Size, Growth and Country-Specific Trends, 2023 to 2030 By Mobility Foresights

September 28, 2023

Related Posts

GCC visa ‘on the table’ in bid to boost tourism – Middle East Monitor

GCC visa ‘on the table’ in bid to boost tourism – Middle East Monitor

by MtR
September 28, 2023
0

Gulf Cooperation Council (GCC) countries are planning to launch a single visa system, which would simplify travel within the region...

Europe Medical Devices Market Report Size, Growth and Country-Specific Trends, 2023 to 2030 By Mobility Foresights

Europe Medical Devices Market Report Size, Growth and Country-Specific Trends, 2023 to 2030 By Mobility Foresights

by MtR
September 28, 2023
0

"The Best Report Benzinga Has Ever Produced" Massive returns are possible within this market! For a limited time, get access...

Global Small Gas Engines Market Size to Reach USD 5.46

Global Small Gas Engines Market Size to Reach USD 5.46

by MtR
September 28, 2023
0

Vancouver, Sept. 28, 2023 (GLOBE NEWSWIRE) -- The global Small Gas Engines Market size was USD 3.21 Billion in 2022...

The Contract Catering Market in Europe & the United States are Anticipated to Achieve Revenues of More than $70 Billion by 2028 – Arizton

The Contract Catering Market in Europe & the United States are Anticipated to Achieve Revenues of More than $70 Billion by 2028 – Arizton

by MtR
September 28, 2023
0

PRESS RELEASEPublished September 28, 2023

Sugar Beet Market size to increase by USD 2.67 billion between 2022 to 2027, Offline Channel to be the major contributing segment

Sugar Beet Market size to increase by USD 2.67 billion between 2022 to 2027, Offline Channel to be the major contributing segment

by MtR
September 27, 2023
0

NEW YORK, Sept. 27, 2023 /PRNewswire/ -- The sugar beet market size is expected to grow by USD 2.67 billion from 2022...

Load More
  • Trending
  • Comments
  • Latest
Bank of England tells ministers to intervene on digital currency ‘programming’

Bank of England tells ministers to intervene on digital currency ‘programming’

June 21, 2021
Tips for checking smoke alarms during daylight saving time

Tips for checking smoke alarms during daylight saving time

March 12, 2022
GLOBAL MARKETS-U.S. stocks follow Europe up; Treasury yields rise, dollar firm

GLOBAL MARKETS-U.S. stocks follow Europe up; Treasury yields rise, dollar firm

July 9, 2021
What will Durham County education bonds pay for? A full list

What will Durham County education bonds pay for? A full list

July 8, 2022
African currencies week ahead: Zambia's kwacha seen on back foot, Kenyan shilling up – Business Recorder

African currencies week ahead: Zambia's kwacha seen on back foot, Kenyan shilling up – Business Recorder

0
Maxum Foods releases Global Dairy Commodity Update for June

Maxum Foods releases Global Dairy Commodity Update for June

0
Letter: Perpetual bonds can help states fight hunger

Letter: Perpetual bonds can help states fight hunger

0
United Kingdom ETFs Are Riding the Re-Opening Momentum

United Kingdom ETFs Are Riding the Re-Opening Momentum

0
Increasing Public Health Awareness and Demand for Innovative Medical Technologies

Increasing Public Health Awareness and Demand for Innovative Medical Technologies

September 28, 2023
Truck Cranes Market Is Anticipated To Reach US$ 14.9

Truck Cranes Market Is Anticipated To Reach US$ 14.9

September 28, 2023
Alibaba’s Logistics Firm May Be This Year’s Hottest IPO

Alibaba’s Logistics Firm May Be This Year’s Hottest IPO

September 28, 2023
Grab These 3 Energy Mutual Funds for Stellar Returns

Grab These 3 Energy Mutual Funds for Stellar Returns

September 28, 2023

Recent News

Increasing Public Health Awareness and Demand for Innovative Medical Technologies

Increasing Public Health Awareness and Demand for Innovative Medical Technologies

September 28, 2023
Truck Cranes Market Is Anticipated To Reach US$ 14.9

Truck Cranes Market Is Anticipated To Reach US$ 14.9

September 28, 2023
Alibaba’s Logistics Firm May Be This Year’s Hottest IPO

Alibaba’s Logistics Firm May Be This Year’s Hottest IPO

September 28, 2023

Categories

  • Asia
  • Bonds
  • Canada
  • Commodities
  • Cryptocurrencies
  • Currencies
  • Emerging Markets
  • ETFs
  • Europe & Middle East
  • IPOs
  • Latin America
  • Mutual Funds
  • Personal Finance
  • Real Estate
  • Retirement
  • Spending & Saving
  • Stocks
  • U.S. Markets
  • Privacy & Policy
  • About Us
  • Contact Us
  • Advertise with us

© 2021 Copyright Market-Reporter

No Result
View All Result
  • Home
  • Markets
    • U.S. Markets
    • Canada
    • Europe & Middle East
    • Emerging Markets
    • Asia
    • Latin America
  • Investing
    • Stocks
    • IPOs
    • Mutual Funds
    • ETFs
    • Bonds
    • Commodities
    • Currencies
    • Cryptocurrencies
  • Economy & Politics
    • Personal Finance
    • Spending & Saving
    • Retirement
    • Real Estate

© 2021 Copyright Market-Reporter