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Emirates Telecommunications Group Company PJSC (ADX:EAND) Might Become A Compounding Machine

Simply Wall St · 2d ago

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding 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. Ergo, when we looked at the ROCE trends at Emirates Telecommunications Group Company PJSC (ADX:EAND), we liked what we saw.

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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 Emirates Telecommunications Group Company PJSC:

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

0.21 = د.إ21b ÷ (د.إ194b - د.إ92b) (Based on the trailing twelve months to September 2025).

Thus, Emirates Telecommunications Group Company PJSC has an ROCE of 21%. 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 Emirates Telecommunications Group Company PJSC

roce
ADX:EAND Return on Capital Employed December 28th 2025

In the above chart we have measured Emirates Telecommunications Group Company PJSC's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Emirates Telecommunications Group Company PJSC for free.

How Are Returns Trending?

We'd be pretty happy with returns on capital like Emirates Telecommunications Group Company PJSC. The company has consistently earned 21% for the last five years, and the capital employed within the business has risen 30% in that time. With returns that high, it's great that the business can continually reinvest its money at such appealing rates of return. If Emirates Telecommunications Group Company PJSC can keep this up, we'd be very optimistic about its future.

On a separate but related note, it's important to know that Emirates Telecommunications Group Company PJSC has a current liabilities to total assets ratio of 47%, which we'd consider pretty high. This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.

The Bottom Line On Emirates Telecommunications Group Company PJSC's ROCE

Emirates Telecommunications Group Company PJSC has demonstrated its proficiency by generating high returns on increasing amounts of capital employed, which we're thrilled about. In light of this, the stock has only gained 35% over the last five years for shareholders who have owned the stock in this period. So because of the trends we're seeing, we'd recommend looking further into this stock to see if it has the makings of a multi-bagger.

If you'd like to know more about Emirates Telecommunications Group Company PJSC, we've spotted 3 warning signs, and 1 of them shouldn't be ignored.

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.