There's Been No Shortage Of Growth Recently For SCR

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Oct 17, 2023

There's Been No Shortage Of Growth Recently For SCR

Stock Analysis To find a multi-bagger stock, what are the underlying trends we should look for in a business? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing,

Stock Analysis

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So on that note, SCR-Sibelco (EBR:094426466) looks quite promising in regards to its trends of return on capital.

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. Analysts use this formula to calculate it for SCR-Sibelco:

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

0.10 = €206m ÷ (€2.6b - €566m) (Based on the trailing twelve months to June 2023).

Thus, SCR-Sibelco has an ROCE of 10%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Metals and Mining industry average of 12%.

Check out our latest analysis for SCR-Sibelco

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'd like to look at how SCR-Sibelco has performed in the past in other metrics, you can view this free graph of past earnings, revenue and cash flow.

We're pretty happy with how the ROCE has been trending at SCR-Sibelco. The data shows that returns on capital have increased by 25% over the trailing five years. That's not bad because this tells for every dollar invested (capital employed), the company is increasing the amount earned from that dollar. Interestingly, the business may be becoming more efficient because it's applying 44% less capital than it was five years ago. SCR-Sibelco may be selling some assets so it's worth investigating if the business has plans for future investments to increase returns further still.

From what we've seen above, SCR-Sibelco has managed to increase it's returns on capital all the while reducing it's capital base. Astute investors may have an opportunity here because the stock has declined 40% in the last five years. With that in mind, we believe the promising trends warrant this stock for further investigation.

One more thing to note, we've identified 1 warning sign with SCR-Sibelco and understanding it should be part of your investment process.

While SCR-Sibelco isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

Find out whether SCR-Sibelco is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.

SCR-Sibelco N.V., a material solutions company, explores for, develops, produces, and sells industrial minerals in Belgium and internationally.

Flawless balance sheet with proven track record.

SCR-SibelcoReturn on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)SCR-Sibelco has an ROCE of 10%. free 1 warning sign freefair value estimates, risks and warnings, dividends, insider transactions and financial health.Have feedback on this article? Concerned about the content?Get in touch with us directly.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.SCR-SibelcoReturn on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)SCR-Sibelco has an ROCE of 10%. free 1 warning sign freefair value estimates, risks and warnings, dividends, insider transactions and financial health.Have feedback on this article? Concerned about the content?Get in touch with us directly.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.SCR-SibelcoReturn on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)SCR-Sibelco has an ROCE of 10%. free 1 warning sign freefair value estimates, risks and warnings, dividends, insider transactions and financial health.Have feedback on this article? Concerned about the content?Get in touch with us directly.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.SCR-SibelcoReturn on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)SCR-Sibelco has an ROCE of 10%. free 1 warning sign freefair value estimates, risks and warnings, dividends, insider transactions and financial health.Have feedback on this article? Concerned about the content?Get in touch with us directly.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.SCR-SibelcoReturn on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)SCR-Sibelco has an ROCE of 10%. free 1 warning sign freefair value estimates, risks and warnings, dividends, insider transactions and financial health.Have feedback on this article? Concerned about the content?Get in touch with us directly.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.SCR-SibelcoReturn on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)SCR-Sibelco has an ROCE of 10%. free 1 warning sign freefair value estimates, risks and warnings, dividends, insider transactions and financial health.Have feedback on this article? Concerned about the content?Get in touch with us directly.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.