Returns At Ooredoo Q.P.S.C (DSM:ORDS) Are On The Way Up

What are the early trends we should look for to identify a stock that could multiply in value over the long term? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing 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. With that in mind, we've noticed some promising trends at Ooredoo Q.P.S.C (DSM:ORDS) so let's look a bit deeper.

We've discovered 1 warning sign about Ooredoo Q.P.S.C. View them for free.

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 Ooredoo Q.P.S.C:

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

0.11 = ر.ق5.3b ÷ (ر.ق61b - ر.ق14b) (Based on the trailing twelve months to March 2025).

Therefore, Ooredoo Q.P.S.C has an ROCE of 11%. By itself that's a normal return on capital and it's in line with the industry's average returns of 11%.

Check out our latest analysis for Ooredoo Q.P.S.C

In the above chart we have measured Ooredoo Q.P.S.C'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 analyst report for Ooredoo Q.P.S.C .

So How Is Ooredoo Q.P.S.C's ROCE Trending?

We're pretty happy with how the ROCE has been trending at Ooredoo Q.P.S.C. The figures show that over the last five years, returns on capital have grown by 93%. That's a very favorable trend because this means that the company is earning more per dollar of capital that's being employed. Interestingly, the business may be becoming more efficient because it's applying 24% less capital than it was five years ago. Ooredoo Q.P.S.C may be selling some assets so it's worth investigating if the business has plans for future investments to increase returns further still.

The Bottom Line On Ooredoo Q.P.S.C's ROCE

In a nutshell, we're pleased to see that Ooredoo Q.P.S.C has been able to generate higher returns from less capital. And a remarkable 157% total return over the last five years tells us that investors are expecting more good things to come in the future. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence.

Ooredoo Q.P.S.C does have some risks though, and we've spotted 1 warning sign for Ooredoo Q.P.S.C that you might be interested in.

While Ooredoo Q.P.S.C 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.