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Why The 25% Return On Capital At Delfi (SGX:P34) Should Have Your Attention
[email protected] (Simply Wall St)
Tue, December 5, 2023, 8:25 AM GMT+8· 2 min read
What are the early trends we should look for to identify a stock that could multiply in value over the long term? Typically, we' ll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it' s a business that is reinvesting profits at increasing rates of return. And in light of that, the trends we' re seeing at Delfi' s (SGX:P34) look very promising so lets take a look.
Return On Capital Employed (ROCE): What Is It?
For those who don' t know, ROCE is a measure of a company' s yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Delfi:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.25 = US$69m ÷ (US$395m - US$118m) (Based on the trailing twelve months to June 2023).
Thus, Delfi has an ROCE of 25%. That' s a fantastic return and not only that, it outpaces the average of 14% earned by companies in a similar industry.
View our latest analysis for Delfi
roce
In the above chart we have measured Delfi' s prior ROCE against its prior performance, but the future is arguably more important. If you' re interested, you can view the analysts predictions in our free report on analyst forecasts for the company.
What Does the ROCE Trend For Delfi Tell Us?
Delfi is displaying some positive trends. Over the last five years, returns on capital employed have risen substantially to 25%. 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 25%. So we' re very much inspired by what we' re seeing at Delfi thanks to its ability to profitably reinvest capital.
Our Take On Delfi' s ROCE
In summary, it' s great to see that Delfi 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. Considering the stock has delivered 2.2% to its stockholders over the last five years, it may be fair to think that investors aren' t fully aware of the promising trends yet. So exploring more about this stock could uncover a good opportunity, if the valuation and other metrics stack up.
- P34.SI
[email protected] (Simply Wall St)
Tue, December 5, 2023, 8:25 AM GMT+8· 2 min read
What are the early trends we should look for to identify a stock that could multiply in value over the long term? Typically, we' ll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it' s a business that is reinvesting profits at increasing rates of return. And in light of that, the trends we' re seeing at Delfi' s (SGX:P34) look very promising so lets take a look.
Return On Capital Employed (ROCE): What Is It?
For those who don' t know, ROCE is a measure of a company' s yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Delfi:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.25 = US$69m ÷ (US$395m - US$118m) (Based on the trailing twelve months to June 2023).
Thus, Delfi has an ROCE of 25%. That' s a fantastic return and not only that, it outpaces the average of 14% earned by companies in a similar industry.
View our latest analysis for Delfi
roce
In the above chart we have measured Delfi' s prior ROCE against its prior performance, but the future is arguably more important. If you' re interested, you can view the analysts predictions in our free report on analyst forecasts for the company.
What Does the ROCE Trend For Delfi Tell Us?
Delfi is displaying some positive trends. Over the last five years, returns on capital employed have risen substantially to 25%. 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 25%. So we' re very much inspired by what we' re seeing at Delfi thanks to its ability to profitably reinvest capital.
Our Take On Delfi' s ROCE
In summary, it' s great to see that Delfi 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. Considering the stock has delivered 2.2% to its stockholders over the last five years, it may be fair to think that investors aren' t fully aware of the promising trends yet. So exploring more about this stock could uncover a good opportunity, if the valuation and other metrics stack up.
Peggy2019 ( Date: 03-Dec-2023 23:38) Posted:
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Thanks. Will add some tomorrow.
ozone2002 ( Date: 03-Dec-2023 15:29) Posted:
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Last:1.12 
+0.02
bottomed out, right time for entry
ride the trend up target 1.16-1.18
+0.02bottomed out, right time for entry
ride the trend up target 1.16-1.18