![]() ![]() We issued our third quarter’s 2022 earnings press release this morning and posted a slide presentation to the Investor Relations portion of our website at. It is now my pleasure to introduce your host, John Guthrie, Executive Vice President and Chief Financial Officer. As a reminder, this conference is being recorded. Greetings, and welcome to the SiteOne Landscape Supply, Inc. Scott Salmon - EVP, Strategy and Development ( NYSE: SITE) Q3 2022 Results Conference Call Novem8:00 AM ET You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself.SiteOne Landscape Supply, Inc. Simply Wall St has no position in any stocks mentioned. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. We aim to bring you long-term focused analysis driven by fundamental data. 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 provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. This article by Simply Wall St is general in nature. Alternatively, email editorial-team (at). Have feedback on this article? Concerned about the content? Get in touch with us directly. 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. ![]() 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. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. On the whole, we feel that SiteOne Landscape Supply's performance has been quite good. This definitely contributes to the high earnings growth number that we discussed above. SiteOne Landscape Supply doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. Is SiteOne Landscape Supply Making Efficient Use Of Its Profits? Such as - high earnings retention or an efficient management in place. However, there could also be other drivers behind this growth. Consequently, this likely laid the ground for the impressive net income growth of 38% seen over the past five years by SiteOne Landscape Supply. Further, the company's ROE is similar to the industry average of 22%. To begin with, SiteOne Landscape Supply seems to have a respectable ROE. ![]() SiteOne Landscape Supply's Earnings Growth And 21% ROE Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. 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. So far, we've learned that ROE is a measure of a company's profitability. What Has ROE Got To Do With Earnings Growth? Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.21 in profit. The 'return' is the income the business earned over the last year. So, based on the above formula, the ROE for SiteOne Landscape Supply is:Ģ1% = US$274m ÷ US$1.3b (Based on the trailing twelve months to October 2022). Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity View our latest analysis for SiteOne Landscape Supply How Do You Calculate Return On Equity? Put another way, it reveals the company's success at turning shareholder investments into profits. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Particularly, we will be paying attention to SiteOne Landscape Supply's ROE today. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. SiteOne Landscape Supply (NYSE:SITE) has had a great run on the share market with its stock up by a significant 13% over the last three months. ![]()
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