Return on Common Equity

Return on Common Equity

A publicly-traded company's earnings (less dividends on preferred shares) divided by the amount of money invested in common stock, expressed as a percentage. This is a measure of how well the company is investing the money invested in it. A high return on common equity indicates that the company is spending wisely and is likely profitable; a low return on common equity indicates the opposite. As a result, high returns on common equity lead to higher stock prices. Some analysts believe that return on common equity is an extremely important indicator in publicly-traded companies' health. See also: Growth stock.
References in periodicals archive ?
For 2005, the rate of return on common equity under the EUB formula is 9.
5 per cent (equivalent to a rate of return on common equity of 12.
As a result, TransCanada earned a return on common equity for the Canadian Mainline of 9.
The decrease is primarily due to lower approved rates of return on common equity applicable to certain of the regulated businesses and dilution associated with the issue of 10.
These positive factors have been more than offset by warmer weather in the first three months of 1997 compared with 1996 in all of the Company's distribution franchise areas, lower approved rates of return on common equity applicable to certain of the regulated businesses, and dilution associated with the issue of 10.
The decrease is primarily due to lower approved rates of return on common equity applicable to the regulated businesses, offset partially by higher rate bases.
This increase was offset partially by lower approved rates of return on common equity applicable to certain of the regulated businesses.
15 per common share relating to a major reorganization of the company's Pipeline and Field Services Divisions, lower approved rates of return on common equity and the recognition in 1995 of $6 million of allowance for funds used during construction of the Empire State Pipeline.
Under the ruling, the company now may accelerate amortization of ADITC in years when the company's consolidated year-end return on common equity falls below 11.
The agreement allows the company to accelerate the use of ADITC if year-end return on common equity drops below 11.
Union Gas has received approval from the Ontario Energy Board (OEB) to continue with existing rates for 1996 based on a rate of return on common equity of 11.
In December, 1995 the NEB approved a 1996 rate of return on common equity of 11.
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