In The Lead: Top 50 / Pittsburgh region's top public companies based on return on equity
GlaxoSmithKline ranks highest in return on equity rankings after 66 percent increase last year
May 15, 2014 12:19 AM
GNC store in Market Square, Downtown Pittsburgh.
Chart: Top companies in ROE For ITL 2014
By Ann Belser / Pittsburgh Post-Gazette
GlaxoSmithKline, which is based in the United Kingdom and has regional offices in Moon, saw its return on equity last year reach 85 percent, up from 66 percent in 2012. That puts the British drugmaker in the lead for this ranking and marks its second year as the top company.
Return on equity, or ROE, is determined by dividing a company's net income by the average shareholder's equity. It is seen as a way to measure how effectively management deploys capital provided by shareholders.
GlaxoSmithKline's return on equity echoed its net income, which rose by 20.8 percent from 2012 to 2013.
PPG Industries, the coatings and glass maker based in Downtown, ranked second with a 71.8 percent ROE in its most recent year, a 179 percent increase from the previous year's 25.7 percent. The company, which brought in $3.2 billion in net income, saw its earnings rise by 243.4 percent in 2013.
There was a significant difference between the top two, in terms of return on equity, and the company in third place — health supplements retailer GNC, which turned in a 31.2 percent ROE. GNC, which has its headquarters in Downtown, was up from the number six spot it earned last year with a 25.8 percent return on equity.
Bombardier, the Montreal-based company that has a West Mifflin operation building people movers such as the one at the Pittsburgh International Airport as well as heavy rail products, had a return on equity last year of 31 percent. That's a huge drop from 2012, when the company posted a 58.4 percent ROE. Bombardier started the year by announcing it was laying off 1,700 employees, mostly in Montreal and Kansas.
The volatility displayed by Bombardier's drop in return on equity was also apparent in Verizon's numbers. The New York City telephone company had an ROE of 12.3 percent in 2012 and more than doubled it to 26 percent in 2013.
Koppers Holdings was also in the Top 10 for 2013 after being close to the bottom of the list for 2012. The company, which is based in Downtown, saw its ROE rise from 4.8 percent to 25.2 percent. The company had net income of $40.4 million, which was a huge drop from its profits the previous year of $65.6 million.
Dick's Sporting Goods, the national retailer headquartered in Findlay, posted a return on equity of 20.6 percent in 2013, which was right in line with its 2012 performance of 18.1 percent.
Wilmerding's rail industry supplier Wabtec, with $292.2 million in net income for 2013, posted a 20.4 percent return on equity, while drugmaker Mylan in Cecil posted a 19.9 percent return on equity with net income of $623.7 million in 2013.
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