CenterPoint Energy Inc (CNP)
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 | 1,760,000 | 1,566,000 | 1,363,000 | 1,039,000 | 1,071,000 |
| Long-term debt | US$ in thousands | 17,559,000 | 14,836,000 | 15,558,000 | 11,521,000 | 14,244,000 |
| Total stockholders’ equity | US$ in thousands | 9,667,000 | 10,042,000 | 9,415,000 | 8,348,000 | 8,359,000 |
| Return on total capital | 6.46% | 6.29% | 5.46% | 5.23% | 4.74% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,760,000K ÷ ($17,559,000K + $9,667,000K)
= 6.46%
Centerpoint Energy Inc.'s return on total capital has shown a fluctuating trend over the past five years. In 2023, the return on total capital was 6.09%, which was an improvement from 2022 when it stood at 5.70%. This indicates the company's ability to generate income from both its debt and equity investments. However, the return in 2023 was lower compared to 2019 when it was 6.17%.
The significant improvement in 2023 compared to the negative return of -0.90% in 2020 is a positive sign for Centerpoint Energy Inc. It suggests that the company has been able to better utilize its capital resources to generate returns for its investors and creditors.
Overall, Centerpoint Energy Inc. should continue to monitor its return on total capital to ensure it remains stable and ideally increases over time, indicating efficient capital allocation and profitability.
Peer comparison
Dec 31, 2023