National Gas and Industrialization (TADAWUL:2080) Is Doing The Right Things To Multiply Its Share Price

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? 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. 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 National Gas and Industrialization's (TADAWUL:2080) returns on capital, so let's have a look.

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

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for National Gas and Industrialization, this is the formula:

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

0.072 = ر.س146m ÷ (ر.س2.6b - ر.س559m) (Based on the trailing twelve months to March 2025).

Therefore, National Gas and Industrialization has an ROCE of 7.2%. On its own, that's a low figure but it's around the 8.0% average generated by the Gas Utilities industry.

See our latest analysis for National Gas and Industrialization

Historical performance is a great place to start when researching a stock so above you can see the gauge for National Gas and Industrialization's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of National Gas and Industrialization.

How Are Returns Trending?

National Gas and Industrialization's ROCE growth is quite impressive. The figures show that over the last five years, ROCE has grown 507% whilst employing roughly the same amount of capital. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward.

The Bottom Line

To sum it up, National Gas and Industrialization is collecting higher returns from the same amount of capital, and that's impressive. And with the stock having performed exceptionally well over the last five years, these patterns are being accounted for by investors. In light of that, we think it's worth looking further into this stock because if National Gas and Industrialization can keep these trends up, it could have a bright future ahead.

On a separate note, we've found 1 warning sign for National Gas and Industrialization you'll probably want to know about.

While National Gas and Industrialization 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.