Returns On Capital Are Showing Encouraging Signs At National Gas and Industrialization (TADAWUL:2080)

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. 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 on that note, National Gas and Industrialization (TADAWUL:2080) looks quite promising in regards to its trends of return on capital.

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

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. The formula for this calculation on National Gas and Industrialization is:

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

0.076 = ر.س155m ÷ (ر.س2.6b - ر.س586m) (Based on the trailing twelve months to June 2025).

Thus, National Gas and Industrialization has an ROCE of 7.6%. On its own that's a low return on capital but it's in line with the industry's average returns of 7.5%.

See our latest analysis for National Gas and Industrialization

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you're interested in investigating National Gas and Industrialization's past further, check out this free graph covering National Gas and Industrialization's past earnings, revenue and cash flow.

What Can We Tell From National Gas and Industrialization's ROCE Trend?

National Gas and Industrialization is showing promise given that its ROCE is trending up and to the right. More specifically, while the company has kept capital employed relatively flat over the last five years, the ROCE has climbed 1,819% in that same time. 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. It's worth looking deeper into this though because while it's great that the business is more efficient, it might also mean that going forward the areas to invest internally for the organic growth are lacking.

The Key Takeaway

In summary, we're delighted to see that National Gas and Industrialization has been able to increase efficiencies and earn higher rates of return on the same amount of capital. And a remarkable 227% total return over the last five years tells us that investors are expecting more good things to come in the future. 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.

National Gas and Industrialization does have some risks though, and we've spotted 1 warning sign for National Gas and Industrialization that you might be interested in.

While National Gas and Industrialization isn't earning the highest return, check out this free list of companies that are 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.