Looking Into M.D.C. Holdings's Return On Invested Capital

According to Benzinga Pro, during Q1, M.D.C. Holdings MDC earned $148.42 million, a 8.75% increase from the preceding quarter. M.D.C. Holdings's sales decreased to $1.27 billion, a 13.37% change since Q4. M.D.C. Holdings earned $162.66 million, and sales totaled $1.47 billion in Q4.

Why Is ROIC Significant?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q1, M.D.C. Holdings posted an ROIC of 4.6%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q1, M.D.C. Holdings posted an ROIC of 4.6%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

For M.D.C. Holdings, the positive return on invested capital ratio of 4.6% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Analyst Predictions

M.D.C. Holdings reported Q1 earnings per share at $2.02/share, which beat analyst predictions of $1.91/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.