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Returns At Fujairah Building Industries P.J.S.C (ADX:FBI) Are On The Way Up
What are the early trends we should look for to identify a stock that could 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. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So on that note, Fujairah Building Industries P.J.S.C (ADX:FBI) looks quite promising in regards to its trends of return on capital.
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. Analysts use this formula to calculate it for Fujairah Building Industries P.J.S.C:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.12 = د.إ39m ÷ (د.إ375m - د.إ55m) (Based on the trailing twelve months to September 2025).
Therefore, Fujairah Building Industries P.J.S.C has an ROCE of 12%. On its own, that's a standard return, however it's much better than the 4.4% generated by the Basic Materials industry.
View our latest analysis for Fujairah Building Industries P.J.S.C
While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you're interested in investigating Fujairah Building Industries P.J.S.C's past further, check out this free graph covering Fujairah Building Industries P.J.S.C's past earnings, revenue and cash flow.
What The Trend Of ROCE Can Tell Us
We're pretty happy with how the ROCE has been trending at Fujairah Building Industries P.J.S.C. The figures show that over the last five years, returns on capital have grown by 29%. That's a very favorable trend because this means that the company is earning more per dollar of capital that's being employed. Speaking of capital employed, the company is actually utilizing 25% less than it was five years ago, which can be indicative of a business that's improving its efficiency. If this trend continues, the business might be getting more efficient but it's shrinking in terms of total assets.
Our Take On Fujairah Building Industries P.J.S.C's ROCE
From what we've seen above, Fujairah Building Industries P.J.S.C has managed to increase it's returns on capital all the while reducing it's capital base. Since the stock has returned a staggering 495% to shareholders over the last five years, it looks like investors are recognizing these changes. In light of that, we think it's worth looking further into this stock because if Fujairah Building Industries P.J.S.C can keep these trends up, it could have a bright future ahead.
One final note, you should learn about the 2 warning signs we've spotted with Fujairah Building Industries P.J.S.C (including 1 which is a bit concerning) .
While Fujairah Building Industries P.J.S.C may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.
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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.