Despite a 14% decrease in stock over the past three months, Oshkosh (NYSE:OSK) financial metrics indicate potential strength. The company's Return on Equity (ROE), a crucial profitability measure, is currently standing at 15%. The ROE is calculated using the formula Net Profit ÷ Shareholders' Equity, with Oshkosh's figures derived from a net profit of $522m and shareholders' equity of $3.5b during the year ending September 2023.
This ROE implies a $0.15 profit per $1 of shareholder investment, demonstrating the efficiency of the company's reinvestment strategy and profit retention. Notably, Oshkosh's ROE equals the industry average of 14%, indicating its competitive performance compared to other companies within the same sector.
However, the company has experienced an unexpected 13% net income decline. This downturn could be attributed to factors such as a high payout ratio or suboptimal capital management strategies. Despite this setback, the robust ROE suggests that Oshkosh may have underlying strengths that could potentially drive future growth.
InvestingPro Insights
Further enriching the analysis, InvestingPro data and tips provide additional insights into Oshkosh's financial health and potential.
According to InvestingPro data, Oshkosh has a market capitalization of $5740M and a revenue growth rate of 19.37% over the last twelve months as of Q3 2023. The company's adjusted P/E ratio stands at 10.77, indicating potentially undervalued stock compared to its earnings.
InvestingPro tips highlight that the company has a history of consistent dividend payments, having raised its dividend for 11 consecutive years. This could be a strong indicator of the company's commitment to returning profits to shareholders. Moreover, the company's net income is expected to grow this year, which aligns with the robust ROE discussed in the article.
It's worth noting that InvestingPro provides many more tips and insights for investors. For instance, there are additional 7 tips related to Oshkosh's financial performance available on the InvestingPro platform, providing comprehensive insights for informed investment decisions.
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