Investors Shouldn't Overlook Grupo Aeroportuario del Sureste S. A. B. de C. V's (BMV:ASURB) Impressive Returns On Capital

What are the early trends we should look for to identify a stock that could multiply in value over the long term? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base 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. Speaking of which, we noticed some great changes in Grupo Aeroportuario del Sureste S. A. B. de C. V's (BMV:ASURB) returns on capital, so let's have a look.

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

For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Grupo Aeroportuario del Sureste S. A. B. de C. V is:

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

0.24 = Mex$15b ÷ (Mex$71b - Mex$7.1b) (Based on the trailing twelve months to September 2023).

Therefore, Grupo Aeroportuario del Sureste S. A. B. de C. V has an ROCE of 24%. While that is an outstanding return, the rest of the Infrastructure industry generates similar returns, on average.

Check out our latest analysis for Grupo Aeroportuario del Sureste S. A. B. de C. V

In the above chart we have measured Grupo Aeroportuario del Sureste S. A. B. de C. V's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Grupo Aeroportuario del Sureste S. A. B. de C. V here for free.

What Does the ROCE Trend For Grupo Aeroportuario del Sureste S. A. B. de C. V Tell Us?

The trends we've noticed at Grupo Aeroportuario del Sureste S. A. B. de C. V are quite reassuring. Over the last five years, returns on capital employed have risen substantially to 24%. Basically the business is earning more per dollar of capital invested and in addition to that, 21% more capital is being employed now too. So we're very much inspired by what we're seeing at Grupo Aeroportuario del Sureste S. A. B. de C. V thanks to its ability to profitably reinvest capital.

The Bottom Line

To sum it up, Grupo Aeroportuario del Sureste S. A. B. de C. V has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. Since the stock has returned a solid 84% to shareholders over the last five years, it's fair to say investors are beginning to recognize these changes. In light of that, we think it's worth looking further into this stock because if Grupo Aeroportuario del Sureste S. A. B. de C. V can keep these trends up, it could have a bright future ahead.

Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 2 warning signs for Grupo Aeroportuario del Sureste S. A. B. de C. V (of which 1 is a bit unpleasant!) that you should know about.

If you'd like to see other companies earning high returns, check out our free list of companies earning high returns with solid balance sheets 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.