Should You Be Excited About Energizer Holdings, Inc.'s (NYSE:ENR) 28% Return On Equity?

Simply Wall St.12-13

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). We'll use ROE to ...

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This article is for those who would like to learn about Return On Equity (ROE). We'll use ROE to ...</p>\n\n<a href=\"https://finance.yahoo.com/news/excited-energizer-holdings-inc-nyse-183532294.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":"ENR","symbol_name":"劲量控股","start_time":0,"source_url":"https://finance.yahoo.com/news/excited-energizer-holdings-inc-nyse-183532294.html","article_id":"2491453353","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/LCxOusrEgEfz6TcdqUQh8Q--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/326ea124a116b3a8e74f95b715189124"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2491453353","pubTimestamp":1734028532,"columns":[],"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 . We'll use ROE to examine Energizer Holdings, Inc. , by way of a worked example.Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.Return on Equity = Net Profit  ÷ Shareholders' Equity. So, based on the above formula, the ROE for Energizer Holdings is:. Return on equity is one way we can compare its business quality of different companies. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"ENR":"劲量控股","BK4215":"住宅房地产投资信托","NYSE":"纽交所","BK4018":"居家用品","BK4585":"ETF&股票定投概念","ROE":"ASTORIA US QUALITY KINGS ETF","BK4588":"碎股","EQR":"资产住宅公司"},"translate_title":"您应该对劲量控股公司（纽约证券交易所股票代码：ENR）28%的股本回报率感到兴奋吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ENR":1,"EQR":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). We'll use ROE to examine Energizer Holdings, Inc. (NYSE:ENR), by way of a worked example. \n Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. \n View our latest analysis for Energizer Holdings \n How To Calculate Return On Equity? \n ROE 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 Energizer Holdings is:\n28% = US$38m ÷ US$136m (Based on the trailing twelve months to September 2024).\n The 'return' is the income the business earned over the last year. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.28. \n Does Energizer Holdings Have A Good ROE? \n One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. Pleasingly, Energizer Holdings has a superior ROE than the average (19%) in the Household Products industry. \n\n\n\n  NYSE:ENR Return on Equity December 12th 2024\n \n\n That is a good sign. With that said, a high ROE doesn't always indicate high profitability. A higher proportion of debt in a company's capital structure may also result in a high ROE, where the high debt levels could be a huge risk . You can see the 4 risks we have identified for Energizer Holdings by visiting our risks dashboard for free  on our platform here. \n The Importance Of Debt To Return On Equity \n Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same. \n Energizer Holdings' Debt And Its 28% ROE \n It seems that Energizer Holdings uses a huge volume of debt to fund the business, since it has an extremely high debt to equity ratio of 23.26. So although the company has an impressive ROE, the company might not have been able to achieve this without the significant use of debt. \n Summary \n Return on equity is one way we can compare its business quality of different companies. A company that can achieve a high return on equity without debt could be considered a high quality business. 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. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to check this FREE visualization of analyst forecasts for the company. \n Of course Energizer Holdings may not be the best stock to buy. So you may wish to see this free collection of other companies that have 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":"dataReport","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/2491453353"}