CenterPoint Energy Inc (CNP)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,052,000 | 1,788,000 | 1,941,000 | 1,307,000 | 1,092,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 10,666,000 | 9,667,000 | 10,045,000 | 9,415,000 | 8,348,000 |
| Return on total capital | 19.24% | 18.50% | 19.32% | 13.88% | 13.08% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,052,000K ÷ ($—K + $10,666,000K)
= 19.24%
CenterPoint Energy Inc's return on total capital has been showing a positive trend over the past five years, increasing from 13.08% as of December 31, 2020, to 19.24% as of December 31, 2024. This indicates that the company has been able to generate a higher return relative to the total capital employed in its operations.
The steady improvement in return on total capital reflects the company's ability to effectively utilize its capital investments to generate profits. This suggests that CenterPoint Energy has been efficient in managing its resources and driving profitability.
An increasing return on total capital is generally viewed positively by investors and stakeholders as it demonstrates the company's ability to generate returns for both debt and equity holders. It also indicates that the company is effectively deploying its capital to create value for its shareholders.
Overall, the upward trend in CenterPoint Energy Inc's return on total capital signifies strong operational performance and financial management, which bodes well for the company's growth and sustainability in the long run.
Peer comparison
Dec 31, 2024