NewMarket Corporation (NEU)
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 | 526,321 | 382,936 | 281,769 | 357,615 | 360,831 |
| Long-term debt | US$ in thousands | 643,622 | 1,003,740 | 789,853 | 598,848 | 642,941 |
| Total stockholders’ equity | US$ in thousands | 1,077,060 | 762,407 | 762,129 | 759,824 | 683,098 |
| Return on total capital | 30.59% | 21.68% | 18.16% | 26.32% | 27.21% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $526,321K ÷ ($643,622K + $1,077,060K)
= 30.59%
NewMarket Corp.'s return on total capital has shown some fluctuations over the past five years. In 2023, the return on total capital increased significantly to 27.75%, indicating an efficient use of both debt and equity to generate profits. This was a notable improvement from 2022 when the return on total capital was 19.86%.
In the earlier years, the return on total capital was 13.38% in 2021, 22.78% in 2020, and 25.23% in 2019. The company's performance in 2023 surpassed both the 5-year average and the returns achieved in 2020 and 2019.
Overall, the trend in NewMarket Corp.'s return on total capital suggests that the company has been able to generate favorable returns on the total capital employed in its operations in recent years, with the highest return observed in 2023. This indicates efficient capital allocation and management strategies within the organization.
Peer comparison
Dec 31, 2023