Alamo Group Inc (ALG)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 115,930 | 136,161 | 101,928 | 80,245 | 57,804 |
| Total stockholders’ equity | US$ in thousands | 1,018,250 | 932,763 | 785,360 | 705,663 | 625,643 |
| ROE | 11.39% | 14.60% | 12.98% | 11.37% | 9.24% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $115,930K ÷ $1,018,250K
= 11.39%
The Return on Equity (ROE) of Alamo Group Inc has shown an upward trend over the years, reflecting improved efficiency in generating profits from shareholders' equity. As of December 31, 2020, the ROE stood at 9.24%, indicating that the company generated approximately 9.24 cents of profit for every dollar of shareholder equity. This metric increased to 11.37% by December 31, 2021, demonstrating a positive trajectory.
Subsequently, the ROE continued to rise to 12.98% by December 31, 2022, and further to 14.60% by December 31, 2023, signaling enhanced returns for shareholders on their investment. However, there was a slight dip in ROE to 11.39% by December 31, 2024, which can be further analyzed to identify the factors contributing to this decrease.
Overall, the increasing trend in ROE indicates that Alamo Group Inc is effectively utilizing shareholder funds to generate profits, thereby enhancing the company's financial performance and potentially attracting investors seeking higher returns on their equity investment.
Peer comparison
Dec 31, 2024