We Like These Underlying Return On Capital Trends At Flughafen Zürich (VTX:FHZN)

To find a multi-bagger stock, what are the underlying trends we should look for in a business? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. Speaking of which, we noticed some great changes in Flughafen Zürich's (VTX:FHZN) returns on capital, so let's have a look.

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What Is Return On Capital Employed (ROCE)?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for Flughafen Zürich:

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

0.09 = CHF447m ÷ (CHF5.3b - CHF330m) (Based on the trailing twelve months to June 2025).

Thus, Flughafen Zürich has an ROCE of 9.0%. In absolute terms, that's a low return but it's around the Infrastructure industry average of 9.5%.

View our latest analysis for Flughafen Zürich

In the above chart we have measured Flughafen Zürich's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free analyst report for Flughafen Zürich .

What The Trend Of ROCE Can Tell Us

Flughafen Zürich is showing promise given that its ROCE is trending up and to the right. More specifically, while the company has kept capital employed relatively flat over the last five years, the ROCE has climbed 111% in that same time. So it's likely that the business is now reaping the full benefits of its past investments, since the capital employed hasn't changed considerably. The company is doing well in that sense, and it's worth investigating what the management team has planned for long term growth prospects.

The Bottom Line On Flughafen Zürich's ROCE

In summary, we're delighted to see that Flughafen Zürich has been able to increase efficiencies and earn higher rates of return on the same amount of capital. And investors seem to expect more of this going forward, since the stock has rewarded shareholders with a 74% return over the last five years. In light of that, we think it's worth looking further into this stock because if Flughafen Zürich can keep these trends up, it could have a bright future ahead.

Flughafen Zürich does have some risks though, and we've spotted 2 warning signs for Flughafen Zürich that you might be interested in.

While Flughafen Zürich isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

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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.