NRG Energy Return On Equity vs. EBITDA
| NRA Stock | EUR 94.18 1.56 1.63% |
For NRG Energy profitability analysis, we use financial ratios and fundamental drivers that measure the ability of NRG Energy to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well NRG Energy utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between NRG Energy's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of NRG Energy over time as well as its relative position and ranking within its peers.
NRG |
NRG Energy EBITDA vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining NRG Energy's current stock value. Our valuation model uses many indicators to compare NRG Energy value to that of its competitors to determine the firm's financial worth. NRG Energy is considered to be number one stock in return on equity category among its peers. It also is considered to be number one stock in ebitda category among its peers totaling about 8,899,026,764 of EBITDA per Return On Equity. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the NRG Energy's earnings, one of the primary drivers of an investment's value.NRG EBITDA vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
NRG Energy |
| = | 0.33 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a measure of a company operating cash flow based on data from the company income statement and is a very good way to compare companies within industries or across different sectors. However, unlike Operating Cash Flow, EBITDA does not include the effects of changes in working capital.
NRG Energy |
| = | 2.93 B |
In a nutshell, EBITDA is calculated by adding back each of the excluded items to the post-tax profit, and can be used to compare companies with very different capital structures.
NRG EBITDA Comparison
NRG Energy is currently under evaluation in ebitda category among its peers.
NRG Energy Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in NRG Energy, profitability is also one of the essential criteria for including it into their portfolios because, without profit, NRG Energy will eventually generate negative long term returns. The profitability progress is the general direction of NRG Energy's change in net profit over the period of time. It can combine multiple indicators of NRG Energy, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
NRG Energy, Inc., together with its subsidiaries, operates as an energy company in the United States. The company was founded in 1989 and is headquartered in Princeton, New Jersey. NRG ENERGY operates under Utilities - Independent Power Producers classification in Germany and is traded on Frankfurt Stock Exchange. It employs 4862 people.
NRG Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on NRG Energy. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of NRG Energy position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the NRG Energy's important profitability drivers and their relationship over time.
Use NRG Energy in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if NRG Energy position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NRG Energy will appreciate offsetting losses from the drop in the long position's value.NRG Energy Pair Trading
NRG Energy Pair Trading Analysis
The ability to find closely correlated positions to NRG Energy could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace NRG Energy when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back NRG Energy - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling NRG Energy to buy it.
The correlation of NRG Energy is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as NRG Energy moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if NRG Energy moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for NRG Energy can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your NRG Energy position
In addition to having NRG Energy in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Companies manufacturing textile accessories and apparel products. The Apparel theme has 38 constituents at this time.
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Additional Information and Resources on Investing in NRG Stock
When determining whether NRG Energy is a strong investment it is important to analyze NRG Energy's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact NRG Energy's future performance. For an informed investment choice regarding NRG Stock, refer to the following important reports:Check out Correlation Analysis. For more detail on how to invest in NRG Stock please use our How to Invest in NRG Energy guide.You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
To fully project NRG Energy's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of NRG Energy at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include NRG Energy's income statement, its balance sheet, and the statement of cash flows.