With A 11% Return On Equity, Is The Greenbrier Companies, Inc. (NYSE:GBX) A Quality Stock?

Simply Wall St.11-13

Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). By way of ...

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(NYSE:GBX) A Quality Stock?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-13 01:39 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/11-return-equity-greenbrier-companies-173938041.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). By way of ...</p>\n\n<a href=\"https://finance.yahoo.com/news/11-return-equity-greenbrier-companies-173938041.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4149","symbol_name":"建筑机械与重型卡车","start_time":0,"source_url":"https://finance.yahoo.com/news/11-return-equity-greenbrier-companies-173938041.html","article_id":"2483032069","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/1URi2Ezh0S1yHVCbTtqf3A--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/bf9784b96ac025e5fc7ddb4f352c9ac4"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2483032069","pubTimestamp":1731433178,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity . By way of learning-by-doing, we'll look at ROE to gain a better understanding of The Greenbrier Companies, Inc. .Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.Return on equity can be calculated by using the formula:. Return on Equity = Net Profit  ÷ Shareholders' Equity. So, based on the above formula, the ROE for Greenbrier Companies is:. Return on equity is a useful indicator of the ability of a business to","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4149":"建筑机械与重型卡车","BK4215":"住宅房地产投资信托","GBX":"格林布赖尔","BK4585":"ETF&股票定投概念","ROE":"ASTORIA US QUALITY KINGS ETF","BK4588":"碎股","NYSE":"纽交所","EQR":"资产住宅公司"},"translate_title":"拥有11%股本回报率的绿蔷薇公司（纽约证券交易所代码：GBX）是一只优质股票吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EQR":1,"GBX":1,"NYSE":1,"ROE":1},"content_text":"Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). By way of learning-by-doing, we'll look at ROE to gain a better understanding of The Greenbrier Companies, Inc. (NYSE:GBX). \n Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. \n See our latest analysis for Greenbrier Companies \n How Is ROE Calculated? \n Return on equity can be calculated by using the formula: \n Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity \nSo, based on the above formula, the ROE for Greenbrier Companies is:\n11% = US$173m ÷ US$1.6b (Based on the trailing twelve months to August 2024).\n The 'return' is the income the business earned over the last year. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.11 in profit. \n Does Greenbrier Companies Have A Good Return On Equity? \n By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As shown in the graphic below, Greenbrier Companies has a lower ROE than the average (15%) in the Machinery industry classification. \n\n\n\n  NYSE:GBX Return on Equity November 12th 2024\n \n\n Unfortunately, that's sub-optimal. However, a low ROE is not always bad. If the company's debt levels are moderate to low, then there's still a chance that returns can be improved via the use of financial leverage. When a company has low ROE but high debt levels, we would be cautious as the risk involved is too high.  Our risks dashboard should have the 3 risks we have identified for Greenbrier Companies. \n Why You Should Consider Debt When Looking At ROE \n Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. \n Greenbrier Companies' Debt And Its 11% ROE \n Greenbrier Companies does use a high amount of debt to increase returns. It has a debt to equity ratio of 1.11. With a fairly low ROE, and significant use of debt, it's hard to get excited about this business at the moment. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it. \n Summary \n Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. \n But when a business is high quality, the market often bids it up to a price that reflects this. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to take a peek at this data-rich interactive graph of forecasts for the company. \n But note: Greenbrier Companies may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2483032069"}