Watts Water Technologies Inc (WTS)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 262,100 | 251,500 | 165,700 | 114,300 | 131,500 |
| Total stockholders’ equity | US$ in thousands | 1,513,300 | 1,300,600 | 1,173,200 | 1,069,800 | 978,000 |
| ROE | 17.32% | 19.34% | 14.12% | 10.68% | 13.45% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $262,100K ÷ $1,513,300K
= 17.32%
ROE, or return on equity, is a key financial ratio that indicates how effectively a company is utilizing its shareholders' equity to generate profits. Watts Water Technologies, Inc.'s ROE has shown fluctuations over the past five years as follows: 17.32% in 2023, 19.34% in 2022, 14.12% in 2021, 10.68% in 2020, and 13.45% in 2019.
The decreasing trend observed from 2019 to 2020 was reversed in 2021 and subsequent years, with a notable improvement in 2022. The ROE of 19.34% in 2022 indicated that the company generated $0.1934 in net income for every dollar of shareholders' equity. However, the decrease to 17.32% in 2023 suggests a slight decline in profitability efficiency in effectively utilizing shareholders' equity.
Overall, Watts Water Technologies, Inc.'s ROE performance has been relatively healthy, indicating a consistent ability to generate profits from investors' capital. It would be important to further analyze the company's financial statements and operations to understand the factors driving these changes in ROE and to assess the sustainability of its profitability in the future.
Peer comparison
Dec 31, 2023