Analyzing CNA Financial Corporation's ( NYSE:CNA ) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess CNA's recent performance announced on 31 March 2019 and compare these figures to its long-term trend and industry movements.
How Did CNA's Recent Performance Stack Up Against Its Past?
CNA's trailing twelve-month earnings (from 31 March 2019) of US$864m has declined by -7.1% 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 3.6%, indicating the rate at which CNA is growing has slowed down. Why is this? Well, let's look at what's occurring with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, CNA Financial has fallen short of achieving a 20% return on equity (ROE), recording 7.5% instead. Furthermore, its return on assets (ROA) of 1.7% is below the US Insurance industry of 2.5%, indicating CNA Financial's are utilized less efficiently. However, its return on capital (ROC), which also accounts for CNA Financial’s debt level, has increased over the past 3 years from 1.6% to 3.6%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 25% to 23% over the past 5 years.
What does this mean?
CNA Financial's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors affecting its business. I recommend you continue to research CNA Financial to get a better picture of the stock by looking at:
- Future Outlook : What are well-informed industry analysts predicting for CNA’s future growth? Take a look at our free research report of analyst consensus for CNA’s outlook.
- Financial Health : Are CNA’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 .
- 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 31 March 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 email@example.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.