Hess Corporation (HES)
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 | 4,383,000 | 2,949,000 | 4,033,000 | 1,968,000 | -2,378,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 11,216,000 | 8,986,000 | 7,982,000 | 6,300,000 | 5,366,000 |
| Return on total capital | 39.08% | 32.82% | 50.53% | 31.24% | -44.32% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,383,000K ÷ ($—K + $11,216,000K)
= 39.08%
Hess Corporation's return on total capital has shown significant fluctuations over the past five years. In 2020, the company had a negative return on total capital of -44.32%, indicating that it was not effectively generating returns on its invested capital. However, there was a substantial improvement in 2021, with the return on total capital increasing to 31.24%, suggesting a more efficient utilization of capital.
The company's performance continued to improve in 2022, with a notable return on total capital of 50.53%, indicating strong profitability relative to the total capital employed. In 2023, there was a slight decrease in the return on total capital to 32.82%, which may indicate some challenges in maintaining the previous year's high profitability.
By the end of 2024, Hess Corporation's return on total capital rose again to 39.08%, demonstrating a solid performance and effective use of capital during that year. Overall, the trend in return on total capital suggests that the company has made improvements in utilizing its capital efficiently, although there have been some fluctuations along the way.
Peer comparison
Dec 31, 2024