Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2012
- Operating Profit Margin since 2012
- Total Asset Turnover since 2012
- Price to Sales (P/S) since 2012
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Profitability Ratios (Summary)
Diamondback Energy Inc., profitability ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Return on Sales | ||||||
| Operating profit margin | ||||||
| Net profit margin | ||||||
| Return on Investment | ||||||
| Return on equity (ROE) | ||||||
| Return on assets (ROA) | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Operating Profit Margin
- The operating profit margin demonstrated a declining trend from 51% in 2017 to 17.88% in 2019, followed by a significant downturn to -198.69% in 2020. In 2021, there was a notable recovery reaching 59.3%, surpassing earlier years.
- Net Profit Margin
- Similarly, the net profit margin declined from 40.65% in 2017 to 6.17% in 2019. It then plummeted sharply to -163.9% in 2020. By 2021, the net profit margin rebounded to 32.34%, indicating improved profitability but still below the initial 2017 level.
- Return on Equity (ROE)
- ROE decreased steadily from 9.18% in 2017 to 1.81% in 2019, followed by a steep negative value of -51.36% in 2020, indicative of significant losses. The ratio recovered to 18.05% in 2021, which is higher than the figures reported in 2017 and 2018.
- Return on Assets (ROA)
- ROA followed a similar pattern, declining from 6.21% in 2017 to 1.02% in 2019, then sharply dropping to -25.64% in 2020. The metric improved to 9.53% in 2021, exceeding the 2017 level.
Overall, the financial indicators reveal a period of deteriorating profitability and returns from 2017 through 2020, with the most severe downturn occurring in 2020. This negative trend affected both margin and return metrics, reflecting substantial operational and financial challenges. The subsequent recovery in 2021 is marked and significant, suggesting a strong rebound in profitability and asset efficiency, although some metrics remain below the peak levels seen at the start of the period.
Return on Sales
Return on Investment
Operating Profit Margin
Diamondback Energy Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Income (loss) from operations | ||||||
| Revenue from contracts with customers | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Operating Profit Margin, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Operating profit margin = 100 × Income (loss) from operations ÷ Revenue from contracts with customers
= 100 × ÷ =
2 Click competitor name to see calculations.
- Income (loss) from operations
- The operational income exhibited notable fluctuations across the analyzed periods. Starting at $605 million in 2017, it increased substantially to $1,011 million in 2018, signaling improved operational performance. However, in 2019, there was a decline to $695 million, indicating a reduction in profitability. A significant downturn occurred in 2020, with operations recording a loss of $5,476 million, reflecting adverse conditions or exceptional events impacting the company. The situation reversed in 2021, with operations yielding a positive income of $4,001 million, suggesting a strong recovery.
- Revenue from contracts with customers
- Revenue demonstrated an overall upward trajectory over the five years. Beginning at $1,186 million in 2017, it surged to $2,130 million in 2018, nearly doubling. The growth continued robustly in 2019, reaching $3,887 million. A contraction occurred in 2020, with revenue decreasing to $2,756 million, consistent with the operational loss seen in the same year. In 2021, revenue markedly increased to $6,747 million, the highest in the period, suggesting a strong market demand or expansion of business activities.
- Operating profit margin
- The operating profit margin followed a volatile pattern. It started high at 51% in 2017, decreasing moderately to 47.46% in 2018, and then more sharply to 17.88% in 2019, indicating declining efficiency or increased costs relative to revenue. In 2020, the margin plummeted to a negative 198.69%, reflecting the significant operational loss within that year. A dramatic recovery occurred in 2021, with the margin rebounding to 59.3%, surpassing previous levels and illustrating a return to strong profitability.
Net Profit Margin
Diamondback Energy Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | ||||||
| Revenue from contracts with customers | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Net Profit Margin, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Net profit margin = 100 × Net income (loss) attributable to Diamondback Energy, Inc. ÷ Revenue from contracts with customers
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to Diamondback Energy, Inc.
- The net income displayed significant volatility over the analyzed period. Starting at $482 million in 2017, it increased sharply to $846 million in 2018, indicating strong operational performance or favorable market conditions. In 2019, net income declined to $240 million, suggesting a deceleration in profitability. The year 2020 saw a substantial loss of $4,517 million, highlighting an extreme adverse event or operational challenge. However, in 2021, the company recovered markedly with net income rising to $2,182 million, indicating a strong rebound.
- Revenue from Contracts with Customers
- Revenue showed a generally upward trajectory throughout the period. Starting at $1,186 million in 2017, revenue nearly doubled to $2,130 million in 2018 and then increased further to $3,887 million in 2019. Despite a decrease to $2,756 million in 2020, revenue surged dramatically to $6,747 million in 2021, representing the highest value in the dataset and indicating a substantial growth in sales or contract volumes.
- Net Profit Margin
- The net profit margin followed a trend consistent with net income, reflecting considerable fluctuations. Very strong margins were observed in 2017 and 2018 at approximately 40%, suggesting efficient operations and solid profitability. This margin sharply declined to 6.17% in 2019, aligning with the reduction in net income. The margin turned deeply negative in 2020, reaching -163.9%, which corresponds to the significant net loss experienced. The following year, the margin rebounded to 32.34%, indicating a solid recovery in profitability but still below earlier peak levels.
Return on Equity (ROE)
Diamondback Energy Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | ||||||
| Total Diamondback Energy, Inc. stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| ROE, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| ROE, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
ROE = 100 × Net income (loss) attributable to Diamondback Energy, Inc. ÷ Total Diamondback Energy, Inc. stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Trend
- The net income attributable to the company exhibited significant volatility over the analyzed periods. Initially, there was a positive net income of 482 million US dollars in 2017, which increased substantially to 846 million US dollars in 2018. However, in 2019, net income sharply declined to 240 million US dollars, followed by a drastic loss of 4,517 million US dollars in 2020. The period ended with a recovery in 2021, reporting a positive net income of 2,182 million US dollars.
- Total Stockholders' Equity Trend
- Total stockholders' equity showed a general upward trajectory from 2017 through 2021, with some fluctuations. It rose from 5,255 million US dollars in 2017 to a peak of 13,699 million US dollars in 2018. The equity remained relatively stable in 2019 at 13,249 million US dollars but dropped to 8,794 million US dollars in 2020. By 2021, stockholders’ equity experienced a partial recovery to 12,088 million US dollars.
- Return on Equity (ROE) Trend
- The return on equity followed the trends observed in net income, reflecting marked instability. It started at 9.18% in 2017 and declined progressively to 6.17% in 2018 and 1.81% in 2019. In 2020, ROE plummeted to a negative 51.36%, indicating a substantial loss relative to equity. The ratio rebounded strongly in 2021 to 18.05%, surpassing the levels seen in previous years.
- Summary of Financial Trends
- The financial performance during the period under review was characterized by pronounced volatility. The sizeable net loss in 2020 heavily impacted both the company’s profitability and equity base, as reflected by the negative ROE and the decline in stockholders’ equity. The subsequent recovery in 2021 suggests an improved earnings capacity and stabilization of shareholder value. Overall, the company’s financial results indicate a period of significant challenges followed by a strong rebound.
Return on Assets (ROA)
Diamondback Energy Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| ROA, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| ROA, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
ROA = 100 × Net income (loss) attributable to Diamondback Energy, Inc. ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) attributable to Diamondback Energy, Inc.
- The net income exhibited significant volatility over the five-year period. Starting at $482 million in 2017, it increased to a peak of $846 million in 2018, followed by a sharp decline to $240 million in 2019. The company experienced a substantial loss of $4,517 million in 2020, likely reflecting adverse market conditions or operational challenges. The income recovered markedly in 2021, reaching $2,182 million, indicating a strong turnaround.
- Total Assets
- Total assets increased dramatically from $7,771 million in 2017 to $21,596 million in 2018, evidencing significant growth or acquisitions. The growth trend continued modestly to $23,531 million in 2019, before declining to $17,619 million in 2020. In 2021, assets rebounded to $22,898 million, suggesting asset base recovery or revaluation post the 2020 downturn.
- Return on Assets (ROA)
- The ROA showed a declining trend from 6.21% in 2017 to 3.92% in 2018 and further down to 1.02% in 2019, reflecting decreasing efficiency in asset utilization for profit generation. In 2020, ROA turned sharply negative at -25.64%, corresponding with the substantial net loss that year. The ratio improved significantly to 9.53% in 2021, indicating enhanced profitability relative to assets.