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Declining Stock and Decent Financials: Is The Market Wrong About Schindler Holding AG (VTX:SCHN)?

Simply Wall St · 2d ago

With its stock down 7.3% over the past three months, it is easy to disregard Schindler Holding (VTX:SCHN). However, stock prices are usually driven by a company’s financials over the long term, which in this case look pretty respectable. Specifically, we decided to study Schindler Holding's ROE in this article.

Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.

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How Do You Calculate Return On Equity?

Return on equity can be calculated by using the formula:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Schindler Holding is:

21% = CHF1.1b ÷ CHF4.9b (Based on the trailing twelve months to September 2025).

The 'return' is the yearly profit. Another way to think of that is that for every CHF1 worth of equity, the company was able to earn CHF0.21 in profit.

Check out our latest analysis for Schindler Holding

What Is The Relationship Between ROE And Earnings Growth?

Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.

Schindler Holding's Earnings Growth And 21% ROE

To begin with, Schindler Holding has a pretty high ROE which is interesting. Second, a comparison with the average ROE reported by the industry of 16% also doesn't go unnoticed by us. This probably laid the groundwork for Schindler Holding's moderate 5.9% net income growth seen over the past five years.

As a next step, we compared Schindler Holding's net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 7.7% in the same period.

past-earnings-growth
SWX:SCHN Past Earnings Growth December 8th 2025

The basis for attaching value to a company is, to a great extent, tied to its earnings growth. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for SCHN? You can find out in our latest intrinsic value infographic research report.

Is Schindler Holding Making Efficient Use Of Its Profits?

While Schindler Holding has a three-year median payout ratio of 61% (which means it retains 39% of profits), the company has still seen a fair bit of earnings growth in the past, meaning that its high payout ratio hasn't hampered its ability to grow.

Besides, Schindler Holding has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Upon studying the latest analysts' consensus data, we found that the company is expected to keep paying out approximately 71% of its profits over the next three years. Accordingly, forecasts suggest that Schindler Holding's future ROE will be 22% which is again, similar to the current ROE.

Conclusion

Overall, we feel that Schindler Holding certainly does have some positive factors to consider. The company has grown its earnings moderately as previously discussed. Still, the high ROE could have been even more beneficial to investors had the company been reinvesting more of its profits. As highlighted earlier, the current reinvestment rate appears to be quite low. Having said that, looking at the current analyst estimates, we found that the company's earnings are expected to gain momentum. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company.