Returns On Capital Are Showing Encouraging Signs At S.N. Nuclearelectrica (BVB:SNN)

If you're looking for a multi-bagger, there's a few things to keep an eye out for. 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. So when we looked at S.N. Nuclearelectrica (BVB:SNN) and its trend of ROCE, we really liked what we saw.

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Understanding 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. To calculate this metric for S.N. Nuclearelectrica, this is the formula:

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

0.15 = RON2.1b ÷ (RON15b - RON1.1b) (Based on the trailing twelve months to September 2025).

Thus, S.N. Nuclearelectrica has an ROCE of 15%. In absolute terms, that's a satisfactory return, but compared to the Electric Utilities industry average of 7.0% it's much better.

View our latest analysis for S.N. Nuclearelectrica

In the above chart we have measured S.N. Nuclearelectrica's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for S.N. Nuclearelectrica .

What Does the ROCE Trend For S.N. Nuclearelectrica Tell Us?

Investors would be pleased with what's happening at S.N. Nuclearelectrica. Over the last five years, returns on capital employed have risen substantially to 15%. The amount of capital employed has increased too, by 66%. So we're very much inspired by what we're seeing at S.N. Nuclearelectrica thanks to its ability to profitably reinvest capital.

Our Take On S.N. Nuclearelectrica's ROCE

In summary, it's great to see that S.N. Nuclearelectrica 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 a remarkable 345% total return over the last five years tells us that investors are expecting more good things to come in the future. In light of that, we think it's worth looking further into this stock because if S.N. Nuclearelectrica can keep these trends up, it could have a bright future ahead.

Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 2 warning signs for S.N. Nuclearelectrica (of which 1 is a bit unpleasant!) that you should know about.

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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.