Trex Company Inc (TREX)
Return on equity (ROE)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 205,384 | 193,510 | 142,667 | 154,547 | 184,627 | 199,581 | 258,953 | 231,403 | 208,737 | 227,007 | 195,922 | 181,774 | 175,631 | 167,827 | 167,093 | 155,585 | 144,738 | 134,412 | 121,907 | 129,017 |
| Total stockholders’ equity | US$ in thousands | 716,671 | 691,651 | 623,525 | 560,177 | 518,349 | 556,538 | 641,475 | 721,065 | 725,034 | 720,809 | 648,776 | 590,143 | 588,531 | 544,064 | 499,661 | 451,723 | 449,175 | 423,550 | 391,533 | 363,157 |
| ROE | 28.66% | 27.98% | 22.88% | 27.59% | 35.62% | 35.86% | 40.37% | 32.09% | 28.79% | 31.49% | 30.20% | 30.80% | 29.84% | 30.85% | 33.44% | 34.44% | 32.22% | 31.73% | 31.14% | 35.53% |
December 31, 2023 calculation
ROE = Net income (ttm) ÷ Total stockholders’ equity
= $205,384K ÷ $716,671K
= 28.66%
The return on equity (ROE) of TREX Co., Inc. has shown fluctuations over the past eight quarters, ranging from a low of 22.88% in Q2 2023 to a high of 40.37% in Q2 2022. The trend indicates a general decline in ROE over the recent quarters, possibly signaling a decrease in the company's ability to generate profits from its shareholders' equity.
A high ROE is generally indicative of efficient utilization of shareholder funds to generate profits. The declining trend in ROE may raise concerns among investors and stakeholders about the company's profitability and efficiency in generating returns on its equity.
It is recommended for TREX Co., Inc. management to closely monitor the factors affecting ROE, such as profitability, asset management, financial leverage, and tax management, to identify areas for improvement and enhance shareholder value in the future. A strategic review and potential adjustments to the company's operations or financial structure may be necessary to reverse the declining ROE trend and improve overall financial performance.
Peer comparison
Dec 31, 2023