Genie Energy, a company listed on the New York Stock Exchange (NYSE), has been exceeding expectations with its return on capital employed (ROCE), far surpassing the industry average. As of Tuesday, the company’s ROCE stands at an impressive 34%, while the industry average hovers around only 4.5%.
ROCE is a crucial metric used to gauge a company’s profitability and the efficiency of its capital utilization. It is calculated by dividing a company’s earnings before interest and taxes (EBIT) by the difference between its total assets and current liabilities. Genie Energy’s ROCE, which is based on the trailing twelve months up to June 2023, is 0.34, resulting from dividing $67 million by the difference between $286 million and $87 million.
What sets Genie Energy apart is not only its high ROCE but also its significant expansion of capital employed over the past five years. The company has seen a remarkable 156% growth in this area, signaling positive prospects for potential investors.
Analyzing Genie Energy’s historical performance reveals a consistent upward trend in returns. By comparing the company’s current ROCE with its past returns, it becomes evident that it has experienced substantial growth over time.
One notable factor contributing to Genie Energy’s financial success is its ability to reinvest profits effectively into its business operations. This attribute is commonly associated with high-performing stocks known as “multi-baggers.”
Investors have responded favorably to Genie Energy’s robust performance, as evidenced by a remarkable total return of 210% over the past five years. This suggests that market participants anticipate continued growth from the company in the future.
Overall, Genie Energy’s impressive ROCE and consistent upward trajectory in returns make it an enticing prospect for investors seeking high-performing stocks in the energy sector.
– AI-generated and editor-reviewed article based on Reuters content