Return Trends At Motiva Infraestrutura de Mobilidade (BVMF:MOTV3) Aren't Appealing

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. That's why when we briefly looked at Motiva Infraestrutura de Mobilidade's (BVMF:MOTV3) ROCE trend, we were pretty happy with what we saw.

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What Is Return On Capital Employed (ROCE)?

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. To calculate this metric for Motiva Infraestrutura de Mobilidade, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.10 = R$6.0b ÷ (R$65b - R$5.5b) (Based on the trailing twelve months to June 2025).

Thus, Motiva Infraestrutura de Mobilidade has an ROCE of 10%. By itself that's a normal return on capital and it's in line with the industry's average returns of 10%.

View our latest analysis for Motiva Infraestrutura de Mobilidade

In the above chart we have measured Motiva Infraestrutura de Mobilidade's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Motiva Infraestrutura de Mobilidade .

What Can We Tell From Motiva Infraestrutura de Mobilidade's ROCE Trend?

While the returns on capital are good, they haven't moved much. The company has consistently earned 10% for the last five years, and the capital employed within the business has risen 113% in that time. 10% is a pretty standard return, and it provides some comfort knowing that Motiva Infraestrutura de Mobilidade has consistently earned this amount. Stable returns in this ballpark can be unexciting, but if they can be maintained over the long run, they often provide nice rewards to shareholders.

On a side note, Motiva Infraestrutura de Mobilidade has done well to reduce current liabilities to 8.5% of total assets over the last five years. Effectively suppliers now fund less of the business, which can lower some elements of risk.

Our Take On Motiva Infraestrutura de Mobilidade's ROCE

The main thing to remember is that Motiva Infraestrutura de Mobilidade has proven its ability to continually reinvest at respectable rates of return. And given the stock has only risen 30% over the last five years, we'd suspect the market is beginning to recognize these trends. That's why it could be worth your time looking into this stock further to discover if it has more traits of a multi-bagger.

One more thing, we've spotted 1 warning sign facing Motiva Infraestrutura de Mobilidade that you might find interesting.

While Motiva Infraestrutura de Mobilidade may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.