What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base 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. However, after briefly looking over the numbers, we don't think Excelerate Energy (NYSE:EE) has the makings of a multi-bagger going forward, but let's have a look at why that may be.
What Is Return On Capital Employed (ROCE)?
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 Excelerate Energy is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.077 = US$206m ÷ (US$2.9b - US$197m) (Based on the trailing twelve months to March 2024).
So, Excelerate Energy has an ROCE of 7.7%. Ultimately, that's a low return and it under-performs the Oil and Gas industry average of 13%.
NYSE:EE Return on Capital Employed May 10th 2024
Above you can see how the current ROCE for Excelerate Energy compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Excelerate Energy .
So How Is Excelerate Energy's ROCE Trending?
The returns on capital haven't changed much for Excelerate Energy in recent years. The company has consistently earned 7.7% for the last four years, and the capital employed within the business has risen 33% in that time. Given the company has increased the amount of capital employed, it appears the investments that have been made simply don't provide a high return on capital.
The Bottom Line On Excelerate Energy's ROCE
As we've seen above, Excelerate Energy's returns on capital haven't increased but it is reinvesting in the business. Unsurprisingly then, the total return to shareholders over the last year has been flat. All in all, the inherent trends aren't typical of multi-baggers, so if that's what you're after, we think you might have more luck elsewhere.
Excelerate Energy could be trading at an attractive price in other respects, so you might find our free intrinsic value estimation for EE on our platform quite valuable.
While Excelerate Energy isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.
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.
長期的な価値の複製が可能な株式を特定するには、どのようなトレンドに注目すべきでしょうか?まず、成長しているビジネス、次に、ますます増えている資産を特定したいです。これは、利益を増やして再投資している企業を示しています。そのため、ダイレクトデジタルホールディングス(NASDAQ:DRCT)の見ているトレンドは非常に有望に見えるので、見てみましょう。資本利回り (ROCE)とは何ですか?わからない方には、ROCEは企業が事業に使用する資本から、税引き前利益をどれだけ生成できるかを測定します。アナリストは以下の式を使用して、Bumi Armada BerhadのROCEを計算します。「ROCE = 利息や税金を除いた利益 (EBIT) ÷ (総資産 - 流動負債)」。利益を増やし続けているビジネスであることを証明するには、利益をより高い割合で再投資している必要があります。NYSE:HD Return on Capital Employed 2024年4月10日使用された資本の増加に係わる投資収益率を示すことがROCEであり、簡単に言えば、これらのビジネスタイプは複利計算機械であり、収益を常により高い利回りで再投資していることを意味します。しかし、数字を一瞥しても、Excelerate Energy(NYSE:EE)は今後多くの利益を生み出す可能性がある多バッガーの資格を備えているとは思えませんが、その理由を見てみましょう。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。