Gross Profit Margin 20% is commodity. GPM 40% has durable competitive advantage.
Buffett’s admonition that the stock market is a device used to transfer wealth from the impatient to patient ones.
"One of the most persuasive tests of high-quality is an uninterrupted record of dividend payments going back over many years. We think that a record of continuous dividend payments for the last 20 years or more is an important plus factor in the company’s quality rating.” - Ben Graham, The Intelligent Investor
X0M : 3.80 / 60.21 = 0.06311 (YOC)
ROE = Net Profit (from continuing operations) ÷ Shareholders' Equity
ROE overstated by debt: simplywall.st/stocks/us/telecom/nyse-vz/verizon-communications/news/should-we-be-delighted-with-verizon-communications-incs-nyse/amp
ROE takes into account the amount of debt a company has on its balance sheet. The higher the debt levels, the higher the ROE will be, as long as the company is still profitable.
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for OXY is:
19% = US$5.4b ÷ US$29b (Based on the trailing twelve months to September 2023).
The 'return' is the yearly Profit. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.19.
So, based on the above formula, the ROE for OXY is:
19% = US$5.4b ÷ US$29b (Based on the trailing twelve months to September 2023).
The 'return' is the yearly Profit. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.19.
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