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Returns on Capital Paint A Bright Future For Grupo Aeroportuario del Centro Norte. de (BMV:OMAB)
If you're looking for a multi-bagger, there's a few things to keep an eye out for. 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. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So when we looked at the ROCE trend of Grupo Aeroportuario del Centro Norte. de (BMV:OMAB) we really liked what we saw.
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. Analysts use this formula to calculate it for Grupo Aeroportuario del Centro Norte. de:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.36 = Mex$7.8b ÷ (Mex$24b - Mex$2.5b) (Based on the trailing twelve months to September 2023).
Therefore, 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 24% earned by companies in a similar industry.
Check out our latest analysis for Grupo Aeroportuario del Centro Norte. de
In the above chart we have measured Grupo Aeroportuario del Centro Norte. de's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free report on analyst forecasts for the company.
So How Is Grupo Aeroportuario del Centro Norte. de's ROCE Trending?
Investors would be pleased with what's happening at Grupo Aeroportuario del Centro Norte. de. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 36%. The amount of capital employed has increased too, by 60%. So we're very much inspired by what we're seeing at Grupo Aeroportuario del Centro Norte. de thanks to its ability to profitably reinvest capital.
What We Can Learn From Grupo Aeroportuario del Centro Norte. de's ROCE
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 a remarkable 117% total return over the last five years tells us that investors are expecting more good things to come in the future. 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 want to know some of the risks facing Grupo Aeroportuario del Centro Norte. de we've found 3 warning signs (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
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.
About BMV:OMA B
Grupo Aeroportuario del Centro Norte. de
Grupo Aeroportuario del Centro Norte, S.A.B.
Average dividend payer with acceptable track record.