Can WEC Energy Group, Inc.'s (NYSE:WEC) ROE Continue To Surpass The Industry Average?
Can WEC Energy Group, Inc.'s (NYSE:WEC) ROE Continue To Surpass The Industry Average?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. We'll use ROE to examine WEC Energy Group, Inc. (NYSE:WEC), by way of a worked example.
儘管一些投資者已經精通財務指標（帽子提示），但本文適用於那些想了解股本回報率（ROE）及其重要性的人。舉一個有效的例子，我們將使用投資回報率來考察WEC能源集團有限公司（紐約證券交易所代碼：WEC）。
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
股本回報率或投資回報率是對公司增值和管理投資者資金的有效性的考驗。簡而言之，它用於評估公司相對於其股權資本的盈利能力。
How Is ROE Calculated?
ROE 是如何計算的？
ROE can be calculated by using the formula:
ROE 可以通過以下公式計算：
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股本回報率 = 淨利潤（來自持續經營業務）÷ 股東權益
So, based on the above formula, the ROE for WEC Energy Group is:
因此，根據上述公式，WEC Energy Group的投資回報率爲：
12% = US$1.4b ÷ US$12b (Based on the trailing twelve months to March 2024).
12% = 14億美元 ÷ 120億美元（基於截至2024年3月的過去十二個月）。
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 $0.12 in profit.
“回報” 是企業在過去一年中獲得的收入。對此進行概念化的一種方法是，該公司每擁有1美元的股東資本，就會獲得0.12美元的利潤。
Does WEC Energy Group Have A Good ROE?
WEC能源集團的投資回報率是否良好？
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As you can see in the graphic below, WEC Energy Group has a higher ROE than the average (9.4%) in the Integrated Utilities industry.
可以說，評估公司投資回報率的最簡單方法是將其與行業平均水平進行比較。但是，這種方法僅在粗略檢查時有用，因爲各公司在相同的行業分類中確實存在很大差異。如下圖所示，WEC能源集團的投資回報率高於綜合公用事業行業的平均水平（9.4％）。
That is a good sign. With that said, a high ROE doesn't always indicate high profitability. Aside from changes in net income, a high ROE can also be the outcome of high debt relative to equity, which indicates risk. To know the 2 risks we have identified for WEC Energy Group visit our risks dashboard for free.
這是一個好兆頭。話雖如此，高投資回報率並不總是表示高盈利能力。除了淨收入的變化外，較高的投資回報率也可能是高債務相對於股本的結果，這表明存在風險。要了解我們爲WEC Energy Group確定的兩種風險，請免費訪問我們的風險儀表板。
How Does Debt Impact Return On Equity?
債務如何影響股本回報率？
Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the use of debt will improve the returns, but will not change the equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
幾乎所有公司都需要資金來投資業務，增加利潤。這些現金可以來自發行股票、留存收益或債務。在前兩個案例中，投資回報率將涵蓋這種資本用於增長的用途。在後一種情況下，債務的使用將提高回報，但不會改變股權。以這種方式，債務的使用將提高投資回報率，儘管該業務的核心經濟學保持不變。
Combining WEC Energy Group's Debt And Its 12% Return On Equity
合併WEC能源集團的債務及其12％的股本回報率
It's worth noting the high use of debt by WEC Energy Group, leading to its debt to equity ratio of 1.48. The combination of a rather low ROE and significant use of debt is not particularly appealing. Debt increases risk and reduces options for the company in the future, so you generally want to see some good returns from using it.
值得注意的是，WEC能源集團大量使用債務，導致其債務權益比率爲1.48。相當低的投資回報率和大量使用債務相結合並不是特別有吸引力。債務會增加風險，減少公司未來的選擇，因此您通常希望從使用債務中獲得豐厚的回報。
Conclusion
結論
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.
股本回報率是我們可以比較不同公司的業務質量的一種方式。能夠在沒有債務的情況下實現高股本回報率的公司可以被視爲高質量的企業。如果兩家公司的債務與股權比率大致相同，而一家公司的投資回報率更高，那麼我通常更喜歡投資回報率更高的那家公司。
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So I think it may be worth checking this free report on analyst forecasts for the company.
但是，投資回報率只是更大難題中的一部分，因爲高質量的企業通常以較高的收益倍數進行交易。與股票價格所反映的預期相比，利潤增長率尤其需要考慮。因此，我認爲可能值得查看這份關於分析師對公司的預測的免費報告。
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
如果你更願意去另一家公司——一家財務狀況可能優越的公司——那麼千萬不要錯過這份免費的股本回報率高、債務低的有趣公司的名單。
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