A Note On Essential Utilities, Inc.'s (NYSE:WTRG) ROE and Debt To Equity
A Note On Essential Utilities, Inc.'s (NYSE:WTRG) ROE and Debt To Equity
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Essential Utilities, Inc. (NYSE:WTRG).
雖然一些投資者已經非常精通財務指標(帽子提示),但本文面向的是那些想要了解股本回報率(ROE)及其重要性的人。通過邊做邊學的方式,我們將考察淨資產收益率,以更好地瞭解Essential Utilities,Inc.(紐約證券交易所代碼:WTRG)。
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
股本回報率(ROE)是對一家公司增值和管理投資者資金的效率的測試。簡而言之,它衡量的是一家公司相對於股東權益的盈利能力。
Check out our latest analysis for Essential Utilities
查看我們對基本實用程式的最新分析
How Is ROE Calculated?
淨資產收益率是如何計算的?
The formula for ROE is:
這個淨資產收益率公式是:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股本回報率=(持續經營的)淨利潤?股東權益
So, based on the above formula, the ROE for Essential Utilities is:
因此,根據上述公式,基本公用事業的淨資產收益率為:
8.3% = US$466m ÷ US$5.6b (Based on the trailing twelve months to June 2023).
8.3%=4.66億美元?56億美元(基於截至2023年6月的12個月)。
The 'return' is the amount earned after tax over the last twelve months. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.08 in profit.
“報稅表”是過去12個月的稅後收入。一種將其概念化的方法是,公司每擁有1美元的股東資本,就能獲得0.08美元的利潤。
Does Essential Utilities Have A Good Return On Equity?
基本公用事業公司的股本回報率高嗎?
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. The image below shows that Essential Utilities has an ROE that is roughly in line with the Water Utilities industry average (9.0%).
通過將一家公司的淨資產收益率(ROE)與其行業平均水準進行比較,我們可以快速衡量它有多好。這種方法的侷限性是,一些公司與其他公司有很大的不同,甚至在相同的行業分類中也是如此。下圖顯示,基本公用事業公司的淨資產收益率大致與水務公司行業平均水準(9.0%)持平。
![roe](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20231017/0-f14af7d18d56663da9bdf17beaac9c79-0-2c96dbfdcda5b16e36d6f86992c24171.png/big)
That's neither particularly good, nor bad. While at least the ROE is not lower than the industry, its still worth checking what role the company's debt plays as high debt levels relative to equity may also make the ROE appear high. If a company takes on too much debt, it is at higher risk of defaulting on interest payments. To know the 2 risks we have identified for Essential Utilities visit our risks dashboard for free.
這既不是特別好,也不是特別壞。雖然淨資產收益率至少不低於行業,但它仍然值得檢查公司的債務起到了什麼作用,因為債務相對於股權的高水平也可能使淨資產收益率看起來很高。如果一家公司承擔了太多債務,那麼它拖欠利息的風險就會更高。要了解我們為基本公用事業確定的兩個風險,請免費訪問我們的風險儀錶板。
How Does Debt Impact ROE?
債務對淨資產收益率有何影響?
Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the use of debt will improve the returns, but will not change the equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
公司通常需要投入資金來增加利潤。這些現金可以來自發行股票、留存收益或債務。在前兩種情況下,淨資產收益率將抓住這種資本增長的用途。在後一種情況下,債務的使用將提高回報,但不會改變股權。在這種情況下,債務的使用將提高淨資產收益率,即使企業的核心經濟保持不變。
Combining Essential Utilities' Debt And Its 8.3% Return On Equity
合併基本公用事業公司的債務及其8.3%的股本回報率
Essential Utilities does use a high amount of debt to increase returns. It has a debt to equity ratio of 1.23. Its ROE is quite low, even with the use of significant debt; that's not a good result, in our opinion. Investors should think carefully about how a company might perform if it was unable to borrow so easily, because credit markets do change over time.
基本公用事業公司確實使用了大量的債務來增加回報。它的債務與股本比率為1.23。它的淨資產收益率相當低,即使使用了大量債務;在我們看來,這不是一個好結果。投資者應該仔細考慮,如果一家公司不能如此輕鬆地借款,它可能會表現如何,因為信貸市場確實會隨著時間的推移而變化。
Summary
摘要
Return on equity is useful for comparing the quality of different businesses. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have the same ROE, then I would generally prefer the one with less debt.
股本回報率在比較不同企業的質量時很有用。一家能夠在沒有債務的情況下實現高股本回報率的公司可以被認為是一家高質量的企業。如果兩家公司的淨資產收益率相同,那麼我通常會傾向於債務較少的那一家。
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking this free report on analyst forecasts for the company.
但淨資產收益率只是一個更大的謎題的一部分,因為高質量企業的本益比往往很高。相對於當前價格反映的利潤增長預期,也必須考慮利潤可能增長的速度。所以我覺得這可能值得一查免費分析師對該公司的預測報告.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
當然了,如果你把目光投向別處,你可能會發現這是一筆很棒的投資。所以讓我們來看看這個免費有趣的公司名單。
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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.