PulteGroup's Return On Invested Capital Insights

According to Benzinga Pro, during Q2, PulteGroup PHM earned $652.43 million, a 43.48% increase from the preceding quarter. PulteGroup also posted a total of $3.93 billion in sales, a 23.15% increase since Q1. PulteGroup earned $454.72 million, and sales totaled $3.19 billion in Q1.

What Is ROIC?

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 Q2, PulteGroup posted an ROIC of 6.09%.

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 Q2, PulteGroup posted an ROIC of 6.09%.

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 PulteGroup, the positive return on invested capital ratio of 6.09% 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

PulteGroup reported Q2 earnings per share at $2.73/share, which beat analyst predictions of $2.63/share.

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