Tenaris SA Return On Equity vs. Operating Margin

TW1 Stock  EUR 36.20  0.20  0.55%   
Based on the key profitability measurements obtained from Tenaris SA's financial statements, Tenaris SA may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess Tenaris SA's ability to earn profits and add value for shareholders.
For Tenaris SA profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Tenaris SA to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Tenaris SA utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Tenaris SA's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Tenaris SA over time as well as its relative position and ranking within its peers.
  
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Please note, there is a significant difference between Tenaris SA's value and its price as these two are different measures arrived at by different means. Investors typically determine if Tenaris SA is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Tenaris SA's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Tenaris SA Operating Margin vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Tenaris SA's current stock value. Our valuation model uses many indicators to compare Tenaris SA value to that of its competitors to determine the firm's financial worth.
Tenaris SA is currently regarded as top stock in return on equity category among its peers. It also is currently regarded as top stock in operating margin category among its peers reporting about  1.31  of Operating Margin per Return On Equity. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Tenaris SA's earnings, one of the primary drivers of an investment's value.

Tenaris Operating Margin vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Tenaris SA

Return On Equity

 = 

Net Income

Total Equity

 = 
0.2
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Tenaris SA

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.25 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.

Tenaris Operating Margin Comparison

Tenaris SA is currently under evaluation in operating margin category among its peers.

Tenaris SA Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Tenaris SA, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Tenaris SA will eventually generate negative long term returns. The profitability progress is the general direction of Tenaris SA's change in net profit over the period of time. It can combine multiple indicators of Tenaris SA, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Tenaris S.A., through its subsidiaries, produces and sells seamless and welded steel tubular products and provides related services for the oil and gas industry, and other industrial applications. Tenaris S.A. was founded in 2001 and is headquartered in Luxembourg City, Luxembourg. TENARIS S operates under Oil Gas Equipment Services classification in Germany and is traded on Frankfurt Stock Exchange. It employs 23472 people.

Tenaris Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Tenaris SA. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Tenaris SA position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Tenaris SA's important profitability drivers and their relationship over time.

Use Tenaris SA in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Tenaris SA position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tenaris SA will appreciate offsetting losses from the drop in the long position's value.

Tenaris SA Pair Trading

Tenaris SA Pair Trading Analysis

The ability to find closely correlated positions to Tenaris SA could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Tenaris SA when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Tenaris SA - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Tenaris SA to buy it.
The correlation of Tenaris SA is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Tenaris SA moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Tenaris SA moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Tenaris SA can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Tenaris SA position

In addition to having Tenaris SA in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Momentum
Momentum Theme
Large corporations operating in software, education, financial and car manufacturing industries. The Momentum theme has 40 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Momentum Theme or any other thematic opportunities.
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Other Information on Investing in Tenaris Stock

To fully project Tenaris SA's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Tenaris SA at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Tenaris SA's income statement, its balance sheet, and the statement of cash flows.
Potential Tenaris SA investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Tenaris SA investors may work on each financial statement separately, they are all related. The changes in Tenaris SA's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Tenaris SA's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.