Stock Analysis

We Like Arteche Lantegi Elkartea's (BME:ART) Returns And Here's How They're Trending

What are the early trends we should look for to identify a stock that could multiply in value over the long term? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. And in light of that, the trends we're seeing at Arteche Lantegi Elkartea's (BME:ART) look very promising so lets take a look.

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Return On Capital Employed (ROCE): What Is It?

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. The formula for this calculation on Arteche Lantegi Elkartea is:

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

0.29 = €50m ÷ (€385m - €213m) (Based on the trailing twelve months to June 2025).

Thus, Arteche Lantegi Elkartea has an ROCE of 29%. In absolute terms that's a great return and it's even better than the Electrical industry average of 13%.

See our latest analysis for Arteche Lantegi Elkartea

roce
BME:ART Return on Capital Employed September 11th 2025

Above you can see how the current ROCE for Arteche Lantegi Elkartea compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Arteche Lantegi Elkartea for free.

So How Is Arteche Lantegi Elkartea's ROCE Trending?

Investors would be pleased with what's happening at Arteche Lantegi Elkartea. The data shows that returns on capital have increased substantially over the last five years to 29%. The amount of capital employed has increased too, by 95%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.

Another thing to note, Arteche Lantegi Elkartea has a high ratio of current liabilities to total assets of 55%. This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.

The Bottom Line

A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Arteche Lantegi Elkartea has. And a remarkable 351% total return over the last three years tells us that investors are expecting more good things to come in the future. Therefore, we think it would be worth your time to check if these trends are going to continue.

One more thing to note, we've identified 1 warning sign with Arteche Lantegi Elkartea and understanding it should be part of your investment process.

High returns are a key ingredient to strong performance, so check out our free list ofstocks 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.

About BME:ART

Arteche Lantegi Elkartea

Engages in the design, manufacture, integration, and supply of electrical equipment and solutions focusing on renewable energies and smart grids in Spain and internationally.

Solid track record with excellent balance sheet.

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