Eversource Energy (ES)
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 | 580,425 | 2,544,250 | 2,154,600 | 2,097,340 | 1,723,300 |
| Long-term debt | US$ in thousands | 23,588,600 | 19,724,000 | 17,023,600 | 15,125,900 | 13,770,800 |
| Total stockholders’ equity | US$ in thousands | 14,173,900 | 15,473,200 | 14,599,800 | 14,063,600 | 12,630,000 |
| Return on total capital | 1.54% | 7.23% | 6.81% | 7.19% | 6.53% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $580,425K ÷ ($23,588,600K + $14,173,900K)
= 1.54%
Based on the data provided for Eversource Energy's return on total capital over the past five years, the company's performance in generating returns from its total capital has shown a slight fluctuation. The return on total capital decreased from 6.64% in 2019 to 5.90% in 2023. This decline indicates that the company may have faced challenges in effectively utilizing its total capital to generate returns for its stakeholders.
Although there was a decrease in the return on total capital over the years, Eversource Energy has generally maintained a relatively stable performance, with the return ranging between 5.72% and 6.64%. This suggests that the company has been able to efficiently allocate its capital to generate returns, albeit at varying rates.
Overall, the trend in Eversource Energy's return on total capital does not show significant variability, indicating a consistent performance in utilizing its capital effectively to create value for its investors. It is crucial for the company to continue monitoring and enhancing its capital allocation strategies to sustain and improve its return on total capital in the future.
Peer comparison
Dec 31, 2023