Meritage Corporation (MTH)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 24.83% | 24.57% | 28.63% | 27.88% | 21.66% |
| Operating profit margin | 21.20% | 20.78% | 20.47% | 18.91% | 11.89% |
| Pretax margin | 15.76% | 15.53% | 20.47% | 18.55% | 11.84% |
| Net profit margin | 12.35% | 12.08% | 15.75% | 14.33% | 9.40% |
Meritage Corporation has shown an upward trend in its gross profit margin over the years, increasing from 21.66% in 2020 to 28.63% in 2022, before slightly decreasing to 24.83% in 2024. This indicates the company's ability to efficiently control its production costs and generate profits from its core operations.
Similarly, the operating profit margin has also improved consistently, rising from 11.89% in 2020 to 21.20% in 2024. This suggests that Meritage has effectively managed its operating expenses while increasing operational efficiency.
The pretax margin has shown fluctuation during the period under review, with a peak of 20.47% in 2022, but then decreasing to 15.76% in 2024. This may indicate changes in the company's tax management strategies or other external factors influencing its pre-tax profitability.
In terms of net profit margin, Meritage has experienced fluctuations as well, reaching a high of 15.75% in 2022 but subsequently declining to 12.35% in 2024. This could reflect the impact of various factors such as interest expenses, non-operating income, and taxes on the company's bottom line.
Overall, Meritage Corporation has demonstrated consistent improvement in its profitability margins over the years, although there have been some fluctuations in certain periods. This indicates the company's ability to effectively manage its costs, generate profits from its operations, and adapt to changing market conditions.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 18.83% | 20.00% | 22.34% | 20.25% | 13.86% |
| Return on assets (ROA) | 10.98% | 11.63% | 17.19% | 15.34% | 10.96% |
| Return on total capital | 19.51% | 27.55% | 32.65% | 31.97% | 22.82% |
| Return on equity (ROE) | 15.29% | 16.02% | 25.12% | 24.22% | 18.04% |
The profitability ratios of Meritage Corporation indicate a positive trend over the years 2020 to 2024.
1. Operating Return on Assets (Operating ROA):
- There was a steady increase in the operating return on assets from 13.86% in 2020 to 22.34% in 2022, indicating improved efficiency in generating operating profits from the company's assets.
- Although there was a slight decrease in 2024 to 18.83%, the operating ROA remained relatively high, showcasing operational effectiveness.
2. Return on Assets (ROA):
- The return on assets also displayed an upward trend, reaching its peak at 17.19% in 2022 from 10.96% in 2020.
- However, there was a decline in 2023 and 2024, possibly due to changes in asset utilization or profitability.
3. Return on Total Capital:
- The return on total capital exhibited a similar pattern of improvement, with a notable increase from 22.82% in 2020 to 32.65% in 2022.
- Subsequently, there was a decrease in 2024 to 19.51%, indicating a lower return on the total capital employed in the business.
4. Return on Equity (ROE):
- The return on equity also showed a positive trajectory, peaking at 25.12% in 2022 from 18.04% in 2020.
- However, there was a decline in 2023 and 2024, signaling a decrease in the profitability of shareholder equity.
Overall, the profitability ratios of Meritage Corporation reflect a mixed performance, with improvements in certain years and slight declines in others. Further analysis of the underlying factors influencing these ratios would be necessary to identify specific areas for potential improvement.