With its stock down 6.4% over the past three months, it is easy to disregard Horace Mann Educators (NYSE:HMN). It seems that the market might have completely ignored the positive aspects of the company's fundamentals and decided to weigh-in more on the negative aspects. Long-term fundamentals are usually what drive market outcomes, so it's worth paying close attention. In this article, we decided to focus on Horace Mann Educators' ROE.
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. Put another way, it reveals the company's success at turning shareholder investments into profits.
View our latest analysis for Horace Mann Educators
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 Horace Mann Educators is:
4.7% = US$59m ÷ US$1.3b (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 $1 of its shareholder's investments, the company generates a profit of $0.05.
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.
A Side By Side comparison of Horace Mann Educators' Earnings Growth And 4.7% ROE
On the face of it, Horace Mann Educators' ROE is not much to talk about. A quick further study shows that the company's ROE doesn't compare favorably to the industry average of 11% either. Thus, the low net income growth of 2.9% seen by Horace Mann Educators over the past five years could probably be the result of the low ROE.
Next, on comparing with the industry net income growth, we found that Horace Mann Educators' reported growth was lower than the industry growth of 14% in the same period, which is not something we like to see.
NYSE:HMN Past Earnings Growth September 7th 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. This then helps them determine if the stock is placed for a bright or bleak future. Is HMN fairly valued? This infographic on the company's intrinsic value has everything you need to know.
Is Horace Mann Educators Making Efficient Use Of Its Profits?
While Horace Mann Educators has a decent three-year median payout ratio of 36% (or a retention ratio of 64%), it has seen very little growth in earnings. Therefore, there might be some other reasons to explain the lack in that respect. For example, the business could be in decline.
Moreover, Horace Mann Educators 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. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 37%. However, Horace Mann Educators' ROE is predicted to rise to 11% despite there being no anticipated change in its payout ratio.
Summary
In total, we're a bit ambivalent about Horace Mann Educators' performance. While the company does have a high rate of profit retention, its low rate of return is probably hampering its earnings growth. That being so, the latest analyst forecasts show that the company will continue to see an expansion in its earnings. 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.
在過去的三個月裏,其股價下跌了6.4%,人們很容易忽視賀拉斯·曼教育公司(紐約證券交易所代碼:HMN)。市場似乎完全忽視了該公司基本面的積極方面,而決定更多地關注負面方面。長期基本面通常是推動市場結果的因素,因此值得密切關注。在這篇文章中,我們決定關注賀拉斯·曼教育家的淨資產收益率。
股本回報率或淨資產收益率是股東要考慮的一個重要因素,因為它告訴他們他們的資本再投資的效率。換句話説,它揭示了該公司成功地將股東投資轉化為利潤。
查看我們對Horace Mann教育者的最新分析
淨資產收益率是如何計算的?
這個股本回報率公式是:
股本回報率=(持續經營的)淨利潤?股東權益
因此,根據上述公式,賀拉斯·曼教育工作者的淨資產收益率為:
4.7%=5900萬美元×13億美元(基於截至2022年6月的12個月的往績)。
“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美元,公司就會產生0.05美元的利潤。
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。
Horace Mann教育工作者的收入增長和4.7%淨資產收益率的並列比較
從表面上看,霍勒斯·曼教育家的淨資產收益率(ROE)沒有太多可談的。一項快速的進一步研究顯示,該公司的淨資產收益率(ROE)也不及11%的行業平均水平。因此,Horace Mann教育工作者在過去五年中看到的2.9%的低淨收入增長可能是低ROE的結果。
接下來,對比行業淨收入增長,我們發現賀拉斯·曼教育人的報告增長低於同期14%的行業增長,這是我們不願意看到的。
紐約證券交易所:HMN過去的收益增長2022年9月7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。這有助於他們確定這隻股票是為光明還是黯淡的未來做準備。HMN的價值公平嗎?這張關於公司內在價值的信息圖包含了你需要知道的一切。
霍勒斯·曼的教育工作者是否有效地利用了它的利潤?
雖然Horace Mann教育工作者的三年平均支付率為36%(或留存率為64%),但收入幾乎沒有增長。因此,可能還有其他一些原因來解釋這方面的缺乏。例如,這項業務可能正在衰落。
此外,霍勒斯·曼的教育工作者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。根據最新的分析師預估,我們發現該公司未來三年的派息比率預計將穩定在37%。然而,Horace Mann教育者的淨資產收益率預計將上升到11%,儘管其派息率沒有預期的變化。
摘要
總體而言,我們對賀拉斯·曼教育工作者的表現有些矛盾。雖然該公司的利潤留存率確實很高,但其低迴報率可能正在阻礙其收益增長。既然如此,最新的分析師預測顯示,該公司的收益將繼續增長。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。
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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。