Returns on Capital Paint A Bright Future For Coca-Cola Consolidated (NASDAQ:COKE)

What are the early trends we should look for to identify a stock that could multiply in value over the long term? 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. 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 Coca-Cola Consolidated (NASDAQ:COKE) we really liked what we saw.

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What Is Return On Capital Employed (ROCE)?

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 Coca-Cola Consolidated is:

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

0.22 = US$905m ÷ (US$5.5b - US$1.3b) (Based on the trailing twelve months to June 2025).

So, Coca-Cola Consolidated has an ROCE of 22%. In absolute terms that's a great return and it's even better than the Beverage industry average of 18%.

See our latest analysis for Coca-Cola Consolidated

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 Coca-Cola Consolidated's past further, check out this free graph covering Coca-Cola Consolidated's past earnings, revenue and cash flow.

What Can We Tell From Coca-Cola Consolidated's ROCE Trend?

We like the trends that we're seeing from Coca-Cola Consolidated. The data shows that returns on capital have increased substantially over the last five years to 22%. The amount of capital employed has increased too, by 65%. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.

What We Can Learn From Coca-Cola Consolidated's ROCE

All in all, it's terrific to see that Coca-Cola Consolidated is reaping the rewards from prior investments and is growing its capital base. And a remarkable 478% total return over the last five years tells us that investors are expecting more good things to come in the future. Therefore, we think it would be worth your time to check if these trends are going to continue.

On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for COKE on our platform that is definitely worth checking out.

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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.