LGI Homes (LGIH)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 196,071 | 199,227 | 326,567 | 429,645 | 323,895 |
| Total stockholders’ equity | US$ in thousands | 2,037,230 | 1,856,030 | 1,642,410 | 1,395,850 | 1,139,000 |
| ROE | 9.62% | 10.73% | 19.88% | 30.78% | 28.44% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $196,071K ÷ $2,037,230K
= 9.62%
LGI Homes' return on equity (ROE) has exhibited varying trends over the years based on the provided data. The company's ROE stood at 28.44% as of December 31, 2020, reflecting a strong performance in generating profit relative to shareholders' equity. Subsequently, the ROE increased to 30.78% by December 31, 2021, indicating further improvement in utilizing equity to drive profits.
However, there was a notable decline in ROE to 19.88% by December 31, 2022, signaling a decrease in the efficiency of generating profits from the shareholders' equity. This trend continued into the following years, as the ROE dropped to 10.73% by December 31, 2023, and further declined to 9.62% by December 31, 2024.
Overall, LGI Homes' ROE demonstrates a fluctuating pattern, with initial strong performance giving way to declining efficiency in generating profits relative to shareholders' equity in the subsequent years. This indicates the importance of closely monitoring and analyzing factors impacting ROE to sustain and enhance long-term profitability and shareholder value.
Peer comparison
Dec 31, 2024