SandRidge Energy, Inc. (NYSE:SD) is an oil and natural gas company based in the United States, focusing on the exploration and production of hydrocarbons, primarily in the Mid-Continent region. It competes with other energy firms like Range Resources Corporation, Chesapeake Energy Corporation, Southwestern Energy Company, SM Energy Company, and Northern Oil and Gas, Inc.
SandRidge Energy's Return on Invested Capital (ROIC) is 12.86%, while its Weighted Average Cost of Capital (WACC) is 8.18%. This results in a ROIC to WACC ratio of 1.57, indicating that the company is generating returns that exceed its cost of capital. This suggests efficient capital utilization, as the returns on investments are higher than the costs associated with financing them.
In comparison, Range Resources Corporation (RRC) has a ROIC of 10.96% and a WACC of 6.56%, resulting in a ROIC to WACC ratio of 1.67. This is the highest among the peers, indicating that RRC is the most efficient in generating returns relative to its cost of capital. This suggests strong capital management and investment strategies.
Chesapeake Energy Corporation (CHK) shows a ROIC of 1.08% against a WACC of 5.74%, leading to a ROIC to WACC ratio of 0.19. This indicates that CHK is not generating sufficient returns to cover its cost of capital, suggesting less efficient capital utilization compared to its peers.
Southwestern Energy Company (SWN) has a negative ROIC of -6.16% and a WACC of 7.27%, resulting in a ROIC to WACC ratio of -0.85. This negative ratio indicates that SWN is not generating returns on its investments, highlighting challenges in capital efficiency.
