Otter Tail Corporation (OTTR)
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 | 401,166 | 393,551 | 250,592 | 150,504 | 134,880 |
Long-term debt | US$ in thousands | 824,059 | 823,821 | 734,014 | 624,432 | 689,581 |
Total stockholders’ equity | US$ in thousands | 1,443,010 | 1,217,320 | 990,777 | 870,966 | 781,482 |
Return on total capital | 17.70% | 19.28% | 14.53% | 10.06% | 9.17% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $401,166K ÷ ($824,059K + $1,443,010K)
= 17.70%
The return on total capital for Otter Tail Corporation has exhibited fluctuations over the past five years. In 2023, the return on total capital was 16.09%, a decrease from the previous year's figure of 19.05%. Despite this decline, the return on total capital in 2023 remained relatively strong compared to earlier years, such as in 2020 and 2019 when the returns were 8.62% and 9.13%, respectively.
The trend in Otter Tail Corporation's return on total capital demonstrates variability in the company's efficiency in generating profits from its total capital deployed. The company's ability to maintain a return on total capital above 10% in recent years indicates a reasonably successful utilization of its capital resources to generate returns for shareholders. However, the slight decrease in 2023 compared to 2022 suggests a potential need for further analysis to identify factors impacting the company's return on total capital and to assess strategies for improvement.
Peer comparison
Dec 31, 2023