Gruma. de (BMV:GRUMAB) Is Investing Its Capital With Increasing Efficiency

Simply Wall St · 04/10 20:13

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. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. And in light of that, the trends we're seeing at Gruma. de's (BMV:GRUMAB) look very promising so lets take a look.

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

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on Gruma. de is:

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

0.24 = US$890m ÷ (US$4.5b - US$749m) (Based on the trailing twelve months to December 2024).

So, Gruma. de has an ROCE of 24%. That's a fantastic return and not only that, it outpaces the average of 11% earned by companies in a similar industry.

See our latest analysis for Gruma. de

roce
BMV:GRUMA B Return on Capital Employed April 10th 2025

Above you can see how the current ROCE for Gruma. de 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 Gruma. de for free.

So How Is Gruma. de's ROCE Trending?

We like the trends that we're seeing from Gruma. de. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 24%. 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 30%. So we're very much inspired by what we're seeing at Gruma. de thanks to its ability to profitably reinvest capital.

Our Take On Gruma. de's ROCE

In summary, it's great to see that Gruma. de can compound returns by consistently reinvesting capital at increasing rates of return, because these are some of the key ingredients of those highly sought after multi-baggers. And investors seem to expect more of this going forward, since the stock has rewarded shareholders with a 97% return over the last five years. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence.

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

If you'd like to see other companies earning high returns, check out our free list of companies earning high returns with solid balance sheets here.

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