Returns At Industrie De Nora (BIT:DNR) Are On The Way Up

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So on that note, Industrie De Nora (BIT:DNR) looks quite promising in regards to its trends of return on capital.

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Understanding 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. The formula for this calculation on Industrie De Nora is:

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

0.11 = €117m ÷ (€1.3b - €227m) (Based on the trailing twelve months to June 2025).

Therefore, Industrie De Nora has an ROCE of 11%. On its own, that's a standard return, however it's much better than the 8.4% generated by the Machinery industry.

See our latest analysis for Industrie De Nora

Above you can see how the current ROCE for Industrie De Nora compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Industrie De Nora .

How Are Returns Trending?

Investors would be pleased with what's happening at Industrie De Nora. Over the last five years, returns on capital employed have risen substantially to 11%. Basically the business is earning more per dollar of capital invested and in addition to that, 70% more capital is being employed now too. So we're very much inspired by what we're seeing at Industrie De Nora thanks to its ability to profitably reinvest capital.

What We Can Learn From Industrie De Nora's ROCE

To sum it up, Industrie De Nora has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. And since the stock has fallen 58% over the last three years, there might be an opportunity here. With that in mind, we believe the promising trends warrant this stock for further investigation.

If you want to continue researching Industrie De Nora, you might be interested to know about the 1 warning sign that our analysis has discovered.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.

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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.