Excelerate Energy, Inc. (NYSE:EE) is a company involved in the energy sector, focusing on providing liquefied natural gas (LNG) solutions. It operates in a competitive market alongside companies like PNM Resources, Inc. (PNM), IDACORP, Inc. (IDA), Black Hills Corporation (BKH), Avista Corporation (AVA), and Southwest Gas Holdings, Inc. (SWX). These companies are part of the utilities sector, which is known for its stable but competitive environment.
In analyzing Excelerate Energy's financial performance, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are key metrics. Excelerate Energy's ROIC is 5.21%, while its WACC is 7.28%. This results in a ROIC to WACC ratio of 0.71, indicating that the company is not generating returns that exceed its cost of capital. This suggests that Excelerate Energy may need to improve its capital efficiency to enhance shareholder value.
When comparing Excelerate Energy to its peers, PNM Resources, Inc. has a significantly negative ROIC of -122.19% against a WACC of 4.24%, resulting in a ROIC to WACC ratio of -28.82. This indicates a substantial inefficiency in capital utilization. On the other hand, IDACORP, Inc. has a ROIC of 3.66% and a WACC of 5.60%, with a ROIC to WACC ratio of 0.65, which is slightly lower than Excelerate Energy's ratio.
Black Hills Corporation stands out among its peers with a ROIC of 4.87% and a WACC of 5.38%, resulting in the highest ROIC to WACC ratio of 0.91. This suggests that Black Hills Corporation is the most efficient in generating returns relative to its cost of capital. Avista Corporation and Southwest Gas Holdings, Inc. have ROIC to WACC ratios of 0.80 and 0.60, respectively, indicating varying levels of capital efficiency within the sector.
