Is Prudential Financial, Inc.'s (NYSE:PRU) 8.4% ROE Worse Than Average?
Is Prudential Financial, Inc.'s (NYSE:PRU) 8.4% ROE Worse Than Average?
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). We'll use ROE to examine Prudential Financial, Inc. (NYSE:PRU), by way of a worked example.
許多投資者仍在學習分析股票時可能有用的各種指標。本文適用於那些想了解股本回報率(ROE)的人。舉一個有效的例子,我們將使用投資回報率來研究保誠金融公司(紐約證券交易所代碼:PRU)。
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.
股本回報率或投資回報率是對公司增值和管理投資者資金的有效性的考驗。簡而言之,它衡量公司相對於股東權益的盈利能力。
How Do You Calculate Return On Equity?
你如何計算股本回報率?
ROE can be calculated by using the formula:
ROE 可以通過以下公式計算:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股本回報率 = 淨利潤(來自持續經營業務)÷ 股東權益
So, based on the above formula, the ROE for Prudential Financial is:
因此,根據上述公式,保誠金融的投資回報率爲:
8.4% = US$2.5b ÷ US$30b (Based on the trailing twelve months to December 2023).
8.4% = 25億美元 ÷ 300億美元(基於截至2023年12月的過去十二個月)。
The 'return' refers to a company's earnings over the last year. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.08 in profit.
“回報” 是指公司去年的收益。概念化這一點的一種方法是,公司每擁有1美元的股東資本,就會獲得0.08美元的利潤。
Does Prudential Financial Have A Good ROE?
保誠金融的投資回報率是否良好?
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As shown in the graphic below, Prudential Financial has a lower ROE than the average (13%) in the Insurance industry classification.
確定公司股本回報率是否不錯的一種簡單方法是將其與該行業的平均水平進行比較。但是,這種方法僅在粗略檢查時有用,因爲各公司在相同的行業分類中確實存在很大差異。如下圖所示,保誠金融的投資回報率低於保險行業分類中的平均水平(13%)。
![roe](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240227/0-593890c87e60d32030c81e7137d56250-0-fe7c878bf85d96166489cce7c7ad9ffe.png/big)
That's not what we like to see. Although, we think that a lower ROE could still mean that a company has the opportunity to better its returns with the use of leverage, provided its existing debt levels are low. A company with high debt levels and low ROE is a combination we like to avoid given the risk involved.
這不是我們喜歡看到的。但是,我們認爲,只要現有債務水平較低,較低的投資回報率仍可能意味着公司有機會通過使用槓桿提高回報。鑑於所涉及的風險,高債務水平和低投資回報率的公司是我們希望避免的組合。
Why You Should Consider Debt When Looking At ROE
爲什麼在考慮投資回報率時應該考慮債務
Companies usually need to invest money to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
公司通常需要投資資金來增加利潤。這些現金可以來自留存收益、發行新股(股權)或債務。在第一和第二種情況下,投資回報率將反映出現金投資業務的使用情況。在後一種情況下,用於增長的債務將提高回報,但不會影響總權益。因此,債務的使用可以提高投資回報率,儘管比喻地說,在暴風雨天氣中還會帶來額外的風險。
Prudential Financial's Debt And Its 8.4% ROE
保誠金融的債務及其8.4%的投資回報率
Prudential Financial clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.12. Its ROE is quite low, even with the use of significant debt; that's not a good result, in our opinion. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.
保誠金融顯然使用大量債務來提高回報,因爲其負債權益比率爲1.12。即使使用了巨額債務,其投資回報率也相當低;在我們看來,這不是一個好結果。債務確實會帶來額外的風險,因此只有當公司從中獲得可觀的回報時,債務才是真正值得的。
Summary
摘要
Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. All else being equal, a higher ROE is better.
股本回報率對於比較不同業務的質量很有用。能夠在不負債過多的情況下獲得高股本回報的公司通常質量很好。在其他條件相同的情況下,更高的投資回報率更好。
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So you might want to take a peek at this data-rich interactive graph of forecasts for the company.
但是投資回報率只是更大難題中的一部分,因爲高質量的企業通常以高倍的收益進行交易。與股票價格所反映的預期相比,利潤增長率尤其值得考慮。因此,你可能想看看這張數據豐富的公司預測交互式圖表。
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
當然,通過尋找其他地方,你可能會找到一筆不錯的投資。因此,來看看這份有趣的公司的免費清單吧。
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This article by Simply Wall St is general in nature. 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. 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 aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。