Southwest Gas Holdings Inc (SWX)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 198,815 | 150,889 | -1,622,480 | 200,779 | 232,324 |
| Total stockholders’ equity | US$ in thousands | 3,504,190 | 3,310,040 | 3,058,760 | 2,953,820 | 2,674,950 |
| ROE | 5.67% | 4.56% | -53.04% | 6.80% | 8.69% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $198,815K ÷ $3,504,190K
= 5.67%
Southwest Gas Holdings Inc's return on equity (ROE) shows a fluctuating trend over the past five years. The ROE stood at 8.69% as of December 31, 2020, indicating a decent return generated on shareholders' equity. However, there was a decline in ROE to 6.80% by December 31, 2021, suggesting a less efficient utilization of equity to generate profits.
Significantly, by December 31, 2022, the ROE took a sharp negative turn to -53.04%, reflecting a substantial loss generated in that year relative to the shareholders' equity. This negative ROE raises concerns about the company's profitability, financial health, and the overall management of its assets.
The following year, by December 31, 2023, the ROE improved slightly to 4.56%, indicating a recovery in profitability but still below the levels seen in previous years. Subsequently, as of December 31, 2024, the ROE increased further to 5.67%, showing a continued but moderate progression in generating profits relative to the shareholders' equity.
Overall, Southwest Gas Holdings Inc's ROE trend suggests a mix of performance challenges and recovery efforts. The company needs to focus on optimizing its operations, managing costs effectively, and enhancing profitability to ensure a sustainable and favorable return on equity for its shareholders.
Peer comparison
Dec 31, 2024