blog

Latest from the Quantamize Blog

Industrials Stocks Lead S&P 500 Earnings While Materials and Utilities Lag

Jan 29, 2019

Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions
Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions

 

All Data and Information as of 01/29/2019 Market Open 

 

  • Earnings results of S&P 500 Index constituents are in focus today with 136 of the 500 members of US benchmark index having reported CY4Q2018 earnings results as of market open today, January 29th, 2019. Several earnings have induced broader market movements, including those of Nvidia (NVE) and Caterpillar (CAT) on Monday.  
     
  • In the table below, we provide an overview of S&P 500 Index constituents’ earnings results, aggregated by sector. 

S&P 500 CY4Q2018 Earnings Release Sector Breakdown

  Average Sales Surprise Average EPS Surprise  Average Sales Growth Average Earnings Growth Number Reported Number in Index
S&P 500 ENERGY INDEX 1.04% 1.56% 0.82% -10.94% 3 30
S&P 500 MATERIALS INDEX -0.94% -2.32% -0.49% -5.72% 5 24
S&P 500 INDUSTRIALS INDEX 1.64% 4.33% 6.35% 22.65% 30 69
S&P 500 CONS DISCRET INDEX -2.68% 5.95% 1.26% 6.14% 13 64
S&P 500 CONS STAPLES INDEX 0.47% 3.23% 7.03% 6.61% 10 33
S&P 500 HEALTH CARE INDEX 0.62% 2.26% 6.98% 13.30% 14 61
S&P 500 FINANCIALS INDEX -0.66% 0.74% 2.44% 16.26% 35 68
S&P 500 INFO TECH INDEX 0.10% 2.76% 3.03% 5.12% 18 68
S&P 500 COMM SVC INDEX 0.76% 3.12% 12.10% 28.19% 3 22
S&P 500 UTILITIES INDEX -4.45% -1.17% 4.87% 6.03% 2 27
S&P 500 REAL ESTATE INDEX 2.10% -0.41% 14.59% 28.63% 3 32
Total S&P 500 Index 0.04% 1.75% 4.96% 13.16% 136 500

Source: Bloomberg

  • The industrials sector is the second-most report reported on sector in the S&P 500 Index so far this earnings season with 30 of 69 constituents, or 43.5% of members, reporting their earnings for the quarter. So far through earnings season, S&P 500 industrials stocks are also one of the best performing sectors.
     
  • S&P 500 industrials stocks have generated an aggregate sales surprise of 1.64% and an aggregate EPS surprise of 4.33%, both of which are the second-highest aggregate surprises among all S&P 500 sectors. In addition to this, industrials stocks have generated cumulative y/y EPS growth of 22.65%, the third-highest y/y growth rate among all S&P 500 sectors. The 22.65% cumulative EPS growth rate for S&P 500 industrials stocks is even more noteworthy because analysts project just 12.72% EPS growth for S&P 500 industrials stocks over the next 12 months, which can be seen in the table below.

S&P 500 Sector Index Multiples, Yields, and Projected EPS Growth

  Fwd 12M P/E Ratio T12M P/E Ratio T12M EBIT/EV T12M FCF Yield FWD 12M EPS Growth (%) 3 Year Fwd EPS CAGR
S&P 500 CONS DISCRET INDEX 18.83x 22.26x 4.77% 4.08% 18.21% 13.92%
S&P 500 CONS STAPLES INDEX 17.14x 18.37x 5.80% 3.92% 7.16% 6.12%
S&P 500 INFO TECH INDEX 16.10x 18.39x 6.35% 5.69% 14.20% 10.54%
S&P 500 FINANCIALS INDEX 11.36x 13.02x 8.65% 8.16% 14.65% 12.11%
S&P 500 HEALTH CARE INDEX 15.05x 19.74x 4.70% 4.44% 31.16% 15.97%
S&P 500 INDUSTRIALS INDEX 14.67x 16.53x 4.99% 3.32% 12.72% 11.68%
S&P 500 ENERGY INDEX 16.54x 17.68x 5.56% 3.26% 6.90% 10.32%
S&P 500 UTILITIES INDEX 17.04x 17.32x 4.29% -1.58% 1.59% 3.94%
S&P 500 MATERIALS INDEX 14.69x 15.78x 5.59% 4.52% 7.43% 8.97%
S&P 500 COMM SVC INDEX 15.49x 18.81x 5.47% 4.26% 21.46% 14.50%

Source: Bloomberg

  • As can be seen in the table above, the S&P 500 real estate sector and communication services sector are generating the most robust y/y sales and EPS growth. Real estate stocks and communication services stocks in the S&P 500 were the only sectors to generate both double-digit y/y sales growth in CY4Q2018 and y/y EPS growth above 28%. Additionally, S&P 500 real estate stocks have generated an average sales surprise of 2.10% so far this earnings season, the largest surprise among all S&P 500 sectors.
     
  • It is worth noting that only real estate 3 stocks in the S&P 500 and 3 communication services stocks in the S&P 500 have reported earnings in so far this season, which represents 9.4% and 13.6% of their total sectors, respectively.

S&P 500 Sector Index ROE Dupont Breakdown

  T12M ROE T12M Operating Margin T12M Net Profit Margin T12M Sales / Assets Assets / Equity
S&P 500 CONS DISCRET INDEX 24.63% 8.36% 5.53% 1.01x 4.27x
S&P 500 CONS STAPLES INDEX 26.43% 9.37% 7.09% 1.11x 3.16x
S&P 500 INFO TECH INDEX 29.05% 23.86% 17.53% 0.59x 2.77x
S&P 500 FINANCIALS INDEX 12.64% 22.74% 19.39% 0.07x 8.14x
S&P 500 HEALTH CARE INDEX 15.82% 9.36% 6.63% 0.85x 2.72x
S&P 500 INDUSTRIALS INDEX 16.40% 9.55% 5.79% 0.70x 3.89x
S&P 500 ENERGY INDEX 12.13% 8.24% 8.28% 0.69x 1.93x
S&P 500 UTILITIES INDEX 9.75% 16.92% 10.82% 0.24x 3.58x
S&P 500 MATERIALS INDEX 13.15% 10.73% 8.92% 0.61x 2.25x
S&P 500 COMM SVC INDEX 20.73% 18.88% 18.22% 0.44x 2.54x

Source: Bloomberg

  • Although consumer discretionary stocks in the S&P 500 are performing poorly in terms of sales surprise, sales growth, and EPS growth so far this earnings season, the aggregate sector has generated a leading EPS surprise of 5.95%. The sector’s EPS growth so far this earnings season is concerning, however, as analysts expect consumer discretionary stocks to grow their EPS by 18.21% in the next 12 months while the sector constituents to report so far have only grown their EPS by 6.14%.


We Crunch the Numbers, You Make the Trade.