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NYSE-listed Genie Energy has been exhibiting impressive growth in its return on capital employed (ROCE), significantly outperforming the industry average. As of Tuesday, the company's ROCE stands at a remarkable 34%, compared to the industry's average of 4.5%.
ROCE, a key performance metric that measures a company's profitability and the efficiency with which its capital is utilized, is calculated by dividing a company's earnings before interest and tax (EBIT) by the difference between its total assets and current liabilities. For Genie Energy, this calculation is based on the trailing twelve months to June 2023 and results in an ROCE of 0.34, derived from US$67m ÷ (US$286m - US$87m).
In addition to its high ROCE, Genie Energy has expanded its base of capital employed over the last five years, increasing it by a substantial 156%. This expansion is another positive sign for potential investors.
The company's historical performance indicates a consistent upward trend in returns. A comparison of the company's current ROCE with its past returns reveals that it has experienced considerable growth over time.
A notable aspect of Genie Energy's financial success is its ability to reinvest profitably in its business operations. This characteristic is often associated with high-performing stocks known as "multi-baggers".
Investors have responded positively to Genie Energy's strong performance, as evidenced by the remarkable 210% total return over the past five years. This suggests that market participants anticipate continued growth from the company in the future.
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