Sensient Technologies Corporation (SXT)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	124,666	93,394	140,887	118,745	109,472
Total stockholders’ equity	US$ in thousands	1,060,990	1,053,320	999,598	938,425	934,336
ROE		11.75%	8.87%	14.09%	12.65%	11.72%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $124,666K ÷ $1,060,990K
= 11.75%

Sensient Technologies Corporation's return on equity (ROE) has shown some fluctuations over the past five years. In December 2020, the ROE stood at 11.72%, which increased to 12.65% by December 2021, indicating a positive trend. The ROE continued to improve, reaching 14.09% by December 2022, demonstrating the company's ability to generate more profit from shareholders' equity.

However, in December 2023, there was a notable decline in ROE to 8.87%, which could be a cause for concern as it indicates a lower profitability relative to shareholder investment. Sensient Technologies Corporation experienced a slight recovery in December 2024, with the ROE rising to 11.75%.

Overall, while the company has shown variations in its ROE over the years, it is crucial for management to focus on sustaining and improving ROE to ensure efficient utilization of shareholder funds and enhance long-term profitability. Monitoring factors influencing profitability, operational efficiency, and effective capital allocation will be essential for maintaining a strong ROE in the future.