Steel Dynamics Inc (STLD)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	1,537,130	2,450,880	3,862,670	3,214,070	550,822
Total stockholders’ equity	US$ in thousands	8,934,290	8,866,670	8,130,360	6,304,640	4,345,160
ROE		17.20%	27.64%	47.51%	50.98%	12.68%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $1,537,130K ÷ $8,934,290K
= 17.20%

Steel Dynamics Inc's return on equity (ROE) has shown a positive trend over the past five years. The ROE increased from 12.68% in December 2020 to 50.98% in December 2021, reflecting strong profitability relative to shareholders' equity. In the following years, the ROE remained high, with values of 47.51% in December 2022 and 27.64% in December 2023. However, there was a notable decline in ROE to 17.20% by December 2024.

The substantial increase in ROE from 2020 to 2021 indicates improved efficiency in generating profits from the shareholders' investments. The subsequent high values in 2022 and 2023 suggest sustained profitability and effective utilization of equity.

The decrease in ROE in 2024 may be a concern as it indicates a potential decrease in the company's ability to generate profits based on its equity base. It could be attributed to various factors such as increased expenses, lower net income, or changes in the capital structure.

Overall, while Steel Dynamics Inc has demonstrated strong ROE in recent years, the significant drop in 2024 warrants further investigation to identify underlying reasons and potential strategies to maintain or improve ROE in the future.