NRG Energy Inc. (NRG)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -202,000 | 1,221,000 | 2,187,000 | 510,000 | 4,438,000 |
| Total stockholders’ equity | US$ in thousands | 2,906,000 | 3,828,000 | 3,600,000 | 1,680,000 | 1,678,000 |
| ROE | -6.95% | 31.90% | 60.75% | 30.36% | 264.48% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-202,000K ÷ $2,906,000K
= -6.95%
NRG Energy Inc.'s return on equity (ROE) has displayed significant volatility over the past five years, ranging from a high of 267.67% in 2019 to a low of -8.81% in 2023. The substantial fluctuations in ROE indicate varying levels of profitability and efficiency in the company's operations and utilization of shareholder equity.
The ROE of 60.75% in 2021 reflects a strong performance, demonstrating that NRG Energy Inc. generated $0.608 in net income for every dollar of shareholder equity during that year. This suggests effective management in creating value for shareholders.
However, the negative ROE of -8.81% in 2023 indicates that the company experienced a loss relative to its equity position, raising concerns about its profitability and operational efficiency during that period.
The ROE trend reveals that NRG Energy Inc. has experienced both exceptional and challenging years in terms of generating returns for its shareholders. It is important for the company to analyze the factors contributing to these fluctuations and take strategic actions to enhance its financial performance and ensure sustainable profitability in the future.
Peer comparison
Dec 31, 2023