Investors Should Be Encouraged By Grupo Aeroportuario del Centro Norte. de's (BMV:OMAB) Returns On Capital

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. With that in mind, the ROCE of Grupo Aeroportuario del Centro Norte. de (BMV:OMAB) looks great, so lets see what the trend can tell us.

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 Centro Norte. de is:

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

0.36 = Mex$7.3b ÷ (Mex$23b - Mex$3.0b) (Based on the trailing twelve months to June 2023).

Thus, Grupo Aeroportuario del Centro Norte. de has an ROCE of 36%. That's a fantastic return and not only that, it outpaces the average of 25% earned by companies in a similar industry.

View our latest analysis for Grupo Aeroportuario del Centro Norte. de

Above you can see how the current ROCE for Grupo Aeroportuario del Centro Norte. 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 Grupo Aeroportuario del Centro Norte. de here for free.

What Can We Tell From Grupo Aeroportuario del Centro Norte. de's ROCE Trend?

Investors would be pleased with what's happening at Grupo Aeroportuario del Centro Norte. de. The data shows that returns on capital have increased substantially over the last five years to 36%. Basically the business is earning more per dollar of capital invested and in addition to that, 56% more capital is being employed now too. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.

In Conclusion...

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 Grupo Aeroportuario del Centro Norte. de has. And with a respectable 84% 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. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence.

On a final note, we've found 2 warning signs for Grupo Aeroportuario del Centro Norte. de that we think 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.