Weyco Group (NASDAQ:WEYS) has seen a significant increase in its share market performance, with its stock rising by 7.7% over the last month. The company's financials and their role in this price change have been under scrutiny, focusing on Weyco Group's return on equity (ROE) as a key indicator of profitability.
The ROE for Weyco Group stands at 14%, based on the trailing twelve months to June 2023. This indicates that for every $1 worth of shareholders' equity, the company generated $0.14 in profit.
Although Weyco Group's ROE is respectable, it falls below the industry average of 25%. However, the company has shown a modest net income growth of 11% over the past five years. Factors such as high earnings retention and efficient management could be positively influencing this earnings growth.
When compared to the industry average growth rate of 28% over the same five-year period, Weyco Group's growth rate is lower. This raises some concerns about the company's future earnings potential.
Weyco Group appears to be making efficient use of its profits, with a moderate three-year median payout ratio of 31% and a retention ratio of 69%. The company has demonstrated a respectable amount of growth in earnings, suggesting that it has been reinvesting most of its earnings at a decent rate of return to grow its business. Furthermore, Weyco Group has maintained a tradition of paying dividends over a period of at least ten years, indicating its commitment to sharing profits with shareholders.
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