Alliance Data Profitability Analysis
| 0HCR Stock | 58.89 0.58 0.98% |
Net Income | First Reported 2012-12-31 | Previous Quarter 133 M | Current Value 2 M | Quarterly Volatility 96.2 M |
For Alliance Data profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Alliance Data to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Alliance Data Systems utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Alliance Data's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Alliance Data Systems over time as well as its relative position and ranking within its peers.
Alliance |
Alliance Data Systems Return On Asset vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Alliance Data's current stock value. Our valuation model uses many indicators to compare Alliance Data value to that of its competitors to determine the firm's financial worth. Alliance Data Systems is number one stock in return on equity category among its peers. It also is number one stock in return on asset category among its peers reporting about 0.14 of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Alliance Data Systems is roughly 7.25 . The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Alliance Data's earnings, one of the primary drivers of an investment's value.Alliance Return On Asset vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Alliance Data |
| = | 0.11 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
Alliance Data |
| = | 0.0146 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Alliance Return On Asset Comparison
Alliance Data is currently under evaluation in return on asset category among its peers.
Alliance Data Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Alliance Data, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Alliance Data will eventually generate negative long term returns. The profitability progress is the general direction of Alliance Data's change in net profit over the period of time. It can combine multiple indicators of Alliance Data, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | -19 M | -19.9 M | |
| Operating Income | 1.6 B | 1.7 B | |
| Income Before Tax | 968 M | 648.7 M | |
| Net Income | 718 M | 584.5 M | |
| Income Tax Expense | 231 M | 193.3 M | |
| Total Other Income Expense Net | -625 M | -656.2 M | |
| Net Income Applicable To Common Shares | 200.7 M | 190.7 M | |
| Interest Income | 568 M | 547.6 M | |
| Change To Netincome | 1.7 B | 1.2 B |
Alliance Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Alliance Data. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Alliance Data position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Alliance Data's important profitability drivers and their relationship over time.
Use Alliance Data in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Alliance Data position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alliance Data will appreciate offsetting losses from the drop in the long position's value.Alliance Data Pair Trading
Alliance Data Systems Pair Trading Analysis
The ability to find closely correlated positions to Alliance Data could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Alliance Data when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Alliance Data - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Alliance Data Systems to buy it.
The correlation of Alliance Data is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Alliance Data moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Alliance Data Systems moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Alliance Data can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Alliance Data position
In addition to having Alliance Data in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Additional Tools for Alliance Stock Analysis
When running Alliance Data's price analysis, check to measure Alliance Data's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Alliance Data is operating at the current time. Most of Alliance Data's value examination focuses on studying past and present price action to predict the probability of Alliance Data's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Alliance Data's price. Additionally, you may evaluate how the addition of Alliance Data to your portfolios can decrease your overall portfolio volatility.