Badger Meter Inc (BMI)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 118,049 | 87,295 | 78,723 | 65,156 | 62,148 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 516,482 | 442,422 | 403,070 | 361,259 | 331,068 |
| Return on total capital | 22.86% | 19.73% | 19.53% | 18.04% | 18.77% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $118,049K ÷ ($—K + $516,482K)
= 22.86%
Badger Meter Inc.'s return on total capital has shown a generally positive trend over the past five years. The return on total capital increased from 18.52% in 2019 to 22.86% in 2023, indicating an improvement in the company's profitability and efficiency in generating returns from its total capital employed. This consistent increase suggests that the company has been effectively utilizing its capital to generate value for its shareholders.
The return on total capital exceeding 20% in 2023 is a positive sign, as it indicates that Badger Meter Inc. is efficiently utilizing its total capital to generate profits. This metric is useful for investors and analysts as it provides insight into how well the company is generating returns from both its debt and equity capital.
Overall, the trend in Badger Meter Inc.'s return on total capital reflects positively on the company's financial performance and management's ability to generate value for its stakeholders. It is important to continue monitoring this metric in future periods to ensure the company's sustainable growth and profitability.
Peer comparison
Dec 31, 2023