Sempra Energy (SRE)
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 | 4,874,000 | 3,749,000 | 2,615,000 | 5,094,000 | 3,447,000 |
| Long-term debt | US$ in thousands | — | 24,513,000 | 20,099,000 | — | — |
| Total stockholders’ equity | US$ in thousands | 28,675,000 | 27,115,000 | 25,981,000 | 23,373,000 | 19,929,000 |
| Return on total capital | 17.00% | 7.26% | 5.67% | 21.79% | 17.30% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,874,000K ÷ ($—K + $28,675,000K)
= 17.00%
The return on total capital for Sempra has shown a generally positive trend over the past five years. The ratio has fluctuated within a relatively narrow range, starting at 7.01% in 2019 and reaching 8.70% in 2023. This indicates that the company has been effective in generating returns from its total capital base. It is important to note that the return on total capital exceeding the cost of capital signifies that Sempra is creating value for its shareholders. Overall, the consistent improvement in return on total capital reflects the company's efficient utilization of its capital resources to generate profits over the years.
Peer comparison
Dec 31, 2023