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RWE AG (XTER:RWE) Forward Rate of Return (Yacktman) %

: 32.25% (As of Dec. 2023)
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Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. RWE AG's forward rate of return for was 32.25%.

The historical rank and industry rank for RWE AG's Forward Rate of Return (Yacktman) % or its related term are showing as below:

XTER:RWE' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -28.41   Med: -8.98   Max: 37.46
Current: 35.73

During the past 13 years, RWE AG's highest Forward Rate of Return was 37.46. The lowest was -28.41. And the median was -8.98.

XTER:RWE's Forward Rate of Return (Yacktman) % is ranked better than
95.7% of 442 companies
in the Utilities - Regulated industry
Industry Median: 6.195 vs XTER:RWE: 35.73

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.


RWE AG Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for RWE AG's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

RWE AG Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Forward Rate of Return (Yacktman) %
Get a 7-Day Free Trial Premium Member Only Premium Member Only -27.72 -2.99 31.51 33.62 32.25

RWE AG Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Forward Rate of Return (Yacktman) % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 33.62 34.09 34.59 36.26 32.25

Competitive Comparison

For the Utilities - Diversified subindustry, RWE AG's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


RWE AG Forward Rate of Return (Yacktman) % Distribution

For the Utilities - Regulated industry and Utilities sector, RWE AG's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where RWE AG's Forward Rate of Return (Yacktman) % falls into.



RWE AG Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

RWE AG's Forward Rate of Return of Dec. 2023 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=5.0432381/41.18+0.2
=32.25 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


RWE AG  (XTER:RWE) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.


Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.


RWE AG Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of RWE AG's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.


RWE AG (XTER:RWE) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » RWE AG (XTER:RWE) » Definitions » Forward Rate of Return (Yacktman) %
Address
RWE Platz 1, Essen, NW, DEU, 45141
Since the deal with E.On, RWE is refocused on power generation, mostly in Europe. It owns 38 gigawatts of power generation capacity: 28% from lignite and hard coal plants, 37% from gas plants, 40% from renewables including pumped storage and batteries. Besides Germany, RWE's power plants are chiefly located in the United Kingdom, the Netherlands, Turkey, and the United States for many onshore wind farms.
Executives
Helle Valentin Supervisory Board
Ullrich Sierau Supervisory Board
Mag. Dr. H.c. Monika Kircher Supervisory Board
Dr. Hans-peter Keitel Supervisory Board
Dr. Markus Krebber Board of Directors
Dr. Michael Müller Board of Directors
Zvezdana Seeger Board of Directors
Dr. Werner Brandt Supervisory Board
Ute Gerbaulet Supervisory Board
Dr. Erhard Schipporeit Supervisory Board
Hauke Stars Supervisory Board
Dr. Andreas Wagner Supervisory Board
Dr. Rolf Martin Schmitz Board of Directors
Dagmar Mühlenfeld Supervisory Board
Peter Ottmann Supervisory Board

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