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. So on that note, Aris Water Solutions (NYSE:ARIS) looks quite promising in regards to its trends of return on capital.
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. Analysts use this formula to calculate it for Aris Water Solutions:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.061 = US$65m ÷ (US$1.2b - US$77m) (Based on the trailing twelve months to June 2022).
Thus, Aris Water Solutions has an ROCE of 6.1%. Ultimately, that's a low return and it under-performs the Commercial Services industry average of 9.8%.
View our latest analysis for Aris Water Solutions
![roce](https://usnewsfile.futunn.com/pic/0-16133122-0-fc9fa12ba328954e1b61bbc707a3afa2.png/big)
NYSE:ARIS Return on Capital Employed October 28th 2022
Above you can see how the current ROCE for Aris Water Solutions compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Aris Water Solutions here for free.
What Can We Tell From Aris Water Solutions' ROCE Trend?
While in absolute terms it isn't a high ROCE, it's promising to see that it has been moving in the right direction. Over the last two years, returns on capital employed have risen substantially to 6.1%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 21%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.
The Bottom Line On Aris Water Solutions' ROCE
To sum it up, Aris Water Solutions has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. And investors seem to expect more of this going forward, since the stock has rewarded shareholders with a 20% return over the last year. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence.
Aris Water Solutions does have some risks though, and we've spotted 1 warning sign for Aris Water Solutions that you might be interested in.
While Aris Water Solutions 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.
我们应该寻找哪些早期趋势来识别一只可能在长期内成倍增值的股票?一种常见的方法是尝试找到一家拥有退货已使用资本(ROCE)正在增加,同时也在增长金额已动用资本的比例。简而言之,这些类型的企业是复利机器,这意味着它们不断地以越来越高的回报率对收益进行再投资。所以在这个音符上,ARIS水务解决方案(纽约证券交易所股票代码:ARIS)在其资本回报率趋势方面看起来相当有希望。
资本回报率(ROCE):它是什么?
如果您不确定,只需澄清一下,ROCE是一种评估公司投资于其业务的资本获得多少税前收入(按百分比计算)的指标。分析师使用此公式计算ARIS Water Solutions的价格:
已动用资本回报率=息税前收益(EBIT)?(总资产-流动负债)
0.061美元=6500万美元(12亿美元-7700万美元)(根据截至2022年6月的往绩12个月计算).
因此,ARIS水务解决方案的净资产收益率为6.1%。归根结底,这是一个较低的回报率,表现低于商业服务业9.8%的平均水平。
查看我们对ARIS水务解决方案的最新分析
![roce](https://usnewsfile.futunn.com/pic/0-16133122-0-fc9fa12ba328954e1b61bbc707a3afa2.png/big)
纽约证券交易所:ARIS 2022年10月28日的资本回报率
上面你可以看到Aris Water Solutions目前的净资产收益率(ROCE)与其先前的资本回报率相比如何,但你只能从过去知道这么多。如果您愿意,您可以在这里查看Aris Water Solutions分析师的预测免费的。
我们能从Aris Water Solutions的ROCE趋势中看出什么?
虽然从绝对值来看,这并不是一个很高的净资产收益率,但它有希望看到它一直在朝着正确的方向前进。过去两年,已动用资本回报率大幅上升至6.1%。该公司实际上每使用一美元资本就能赚到更多的钱,值得注意的是,资本额也增加了21%。越来越多的资本带来越来越多的回报,这在多头投资者中很常见,这就是为什么我们对此印象深刻。
ARIS水务解决方案公司ROCE的底线
总而言之,阿里斯水务解决方案公司已经证明,它可以对业务进行再投资,并从所用资本中产生更高的回报,这是非常棒的。投资者似乎预计未来会出现更多这样的情况,因为该股在过去一年里为股东带来了20%的回报。话虽如此,我们仍然认为,前景看好的基本面意味着该公司值得进行进一步的尽职调查。
不过,Aris Water Solutions确实存在一些风险,我们已经发现1个ARIS水溶液警告标志你可能会感兴趣的。
虽然Aris Water Solutions并没有获得最高的回报,但看看这个免费资产负债表稳健、股本回报率高的公司名单。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。