Under The Bonnet, Grupo Aeroportuario del Sureste S. A. B. de C. V's (BMV:ASURB) Returns Look Impressive

If you're looking for a multi-bagger, there's a few things to keep an eye out for. In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. So when we looked at the ROCE trend of Grupo Aeroportuario del Sureste S. A. B. de C. V (BMV:ASURB) we really liked what we saw.

Understanding Return On Capital Employed (ROCE)

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. Analysts use this formula to calculate it for Grupo Aeroportuario del Sureste S. A. B. de C. V:

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

0.25 = Mex$15b ÷ (Mex$69b - Mex$7.8b) (Based on the trailing twelve months to June 2023).

Thus, Grupo Aeroportuario del Sureste S. A. B. de C. V has an ROCE of 25%. On its own that's a fantastic return on capital, though it's the same as the Infrastructure industry average of 25%.

View 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 to see what analysts are forecasting going forward, you should check out our free report for Grupo Aeroportuario del Sureste S. A. B. de C. V.

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

Grupo Aeroportuario del Sureste S. A. B. de C. V is showing promise given that its ROCE is trending up and to the right. The figures show that over the last five years, ROCE has grown 93% whilst employing roughly the same amount of capital. Basically the business is generating higher returns from the same amount of capital and that is proof that there are improvements in the company's efficiencies. The company is doing well in that sense, and it's worth investigating what the management team has planned for long term growth prospects.

Our Take On Grupo Aeroportuario del Sureste S. A. B. de C. V's ROCE

In summary, we're delighted to see that Grupo Aeroportuario del Sureste S. A. B. de C. V has been able to increase efficiencies and earn higher rates of return on the same amount of capital. And with a respectable 51% awarded to those who held the stock over the last five years, you could argue that these developments are starting to get the attention they deserve. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist.

If you'd like to know about the risks facing Grupo Aeroportuario del Sureste S. A. B. de C. V, we've discovered 1 warning sign that you should be aware of.

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.