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Mineralbrunnen Überkingen-Teinach GmbH & Co. KGaA's (FRA:MUT) Stock Is Going Strong: Is the Market Following Fundamentals?

Simply Wall St · 6d ago

Most readers would already be aware that Mineralbrunnen Überkingen-Teinach GmbH KGaA's (FRA:MUT) stock increased significantly by 16% over the past week. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. Particularly, we will be paying attention to Mineralbrunnen Überkingen-Teinach GmbH KGaA's ROE today.

Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Put another way, it reveals the company's success at turning shareholder investments into profits.

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How Is ROE Calculated?

The formula for ROE is:

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

So, based on the above formula, the ROE for Mineralbrunnen Überkingen-Teinach GmbH KGaA is:

14% = €11m ÷ €78m (Based on the trailing twelve months to June 2025).

The 'return' is the yearly profit. So, this means that for every €1 of its shareholder's investments, the company generates a profit of €0.14.

View our latest analysis for Mineralbrunnen Überkingen-Teinach GmbH KGaA

What Is The Relationship Between ROE And Earnings Growth?

So far, we've learned that ROE is a measure of a company's profitability. 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. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.

Mineralbrunnen Überkingen-Teinach GmbH KGaA's Earnings Growth And 14% ROE

To start with, Mineralbrunnen Überkingen-Teinach GmbH KGaA's ROE looks acceptable. And on comparing with the industry, we found that the the average industry ROE is similar at 12%. This certainly adds some context to Mineralbrunnen Überkingen-Teinach GmbH KGaA's moderate 18% net income growth seen over the past five years.

Next, on comparing with the industry net income growth, we found that the growth figure reported by Mineralbrunnen Überkingen-Teinach GmbH KGaA compares quite favourably to the industry average, which shows a decline of 3.3% over the last few years.

past-earnings-growth
DB:MUT Past Earnings Growth January 6th 2026

Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Mineralbrunnen Überkingen-Teinach GmbH KGaA is trading on a high P/E or a low P/E, relative to its industry.

Is Mineralbrunnen Überkingen-Teinach GmbH KGaA Using Its Retained Earnings Effectively?

While Mineralbrunnen Überkingen-Teinach GmbH KGaA has a three-year median payout ratio of 65% (which means it retains 35% 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.

Additionally, Mineralbrunnen Überkingen-Teinach GmbH KGaA has paid dividends over a period of at least ten years which means that the company is pretty serious about sharing its profits with shareholders.

Summary

In total, we are pretty happy with Mineralbrunnen Überkingen-Teinach GmbH KGaA's performance. We are particularly impressed by the considerable earnings growth posted by the company, which was likely backed by its high ROE. While the company is paying out most of its earnings as dividends, it has been able to grow its earnings in spite of it, so that's probably a good sign. So far, we've only made a quick discussion around the company's earnings growth. You can do your own research on Mineralbrunnen Überkingen-Teinach GmbH KGaA and see how it has performed in the past by looking at this FREE detailed graph of past earnings, revenue and cash flows.