Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. 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. Having said that, from a first glance at América Móvil. de (BMV:AMXB) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look.
Understanding 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 América Móvil. de:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.13 = Mex$172b ÷ (Mex$1.8t - Mex$520b) (Based on the trailing twelve months to June 2025).
Therefore, América Móvil. de has an ROCE of 13%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Wireless Telecom industry average of 12%.
View our latest analysis for América Móvil. de
Above you can see how the current ROCE for América Móvil. de 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 América Móvil. de for free.
What Does the ROCE Trend For América Móvil. de Tell Us?
Things have been pretty stable at América Móvil. de, with its capital employed and returns on that capital staying somewhat the same for the last five years. This tells us the company isn't reinvesting in itself, so it's plausible that it's past the growth phase. So don't be surprised if América Móvil. de doesn't end up being a multi-bagger in a few years time. This probably explains why América Móvil. de is paying out 32% of its income to shareholders in the form of dividends. Given the business isn't reinvesting in itself, it makes sense to distribute a portion of earnings among shareholders.
The Bottom Line On América Móvil. de's ROCE
In a nutshell, América Móvil. de has been trudging along with the same returns from the same amount of capital over the last five years. Since the stock has gained an impressive 65% over the last five years, investors must think there's better things to come. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn't high.
América Móvil. de does have some risks though, and we've spotted 2 warning signs for América Móvil. de that you might be interested in.
While América Móvil. de 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.