H2O America (HTO)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	93,967	84,987	73,828	60,478	61,515
Total stockholders’ equity	US$ in thousands	1,366,970	1,233,400	1,110,870	1,034,520	917,160
ROE		6.87%	6.89%	6.65%	5.85%	6.71%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $93,967K ÷ $1,366,970K
= 6.87%

The analysis of H2O America's return on equity (ROE) over the specified period reveals a relatively stable profitability trend, with some fluctuations observed across the five-year span. At the end of 2020, the ROE was 6.71%, indicating that the company generated a modest but consistent return on its shareholders' equity. In 2021, the ROE declined to 5.85%, suggesting a temporary decrease in net income relative to shareholders' equity, which may reflect operational or market-related challenges during that period.

Subsequently, in 2022, the ROE increased to 6.65%, demonstrating a recovery in profitability and an improved efficiency in generating returns on equity. The upward trend continued into 2023, with the ROE reaching 6.89%, representing the highest value in the analyzed timeframe and indicating an improvement in overall profitability and perhaps operational efficiencies or favorable market conditions.

In 2024, the ROE slightly declined to 6.87%. This marginal decrease suggests a stabilization around the previous year's level, with no significant deterioration in return generation. Overall, the company's ROE has remained within a narrow range of approximately 5.85% to 6.89% over five years, exhibiting moderate stability with minor fluctuations. This pattern indicates a consistent ability to generate returns on shareholders' equity, albeit at a level that could be considered modest in comparison to higher-return industry standards. The stable ROE trend suggests effective management but also signals potential for enhancing profitability to deliver higher returns to shareholders.