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Slowing Rates Of Return At Kikkoman (TSE:2801) Leave Little Room For Excitement

Simply Wall St · 2d ago

If you're looking for a multi-bagger, there's a few things to keep an eye out for. 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. That's why when we briefly looked at Kikkoman's (TSE:2801) ROCE trend, we were pretty happy with what we saw.

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Understanding Return On Capital Employed (ROCE)

For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Kikkoman, this is the formula:

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

0.12 = JP¥74b ÷ (JP¥699b - JP¥92b) (Based on the trailing twelve months to September 2025).

Therefore, Kikkoman has an ROCE of 12%. On its own, that's a standard return, however it's much better than the 7.3% generated by the Food industry.

See our latest analysis for Kikkoman

roce
TSE:2801 Return on Capital Employed January 7th 2026

Above you can see how the current ROCE for Kikkoman compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Kikkoman .

What Does the ROCE Trend For Kikkoman Tell Us?

While the current returns on capital are decent, they haven't changed much. The company has consistently earned 12% for the last five years, and the capital employed within the business has risen 82% in that time. 12% is a pretty standard return, and it provides some comfort knowing that Kikkoman has consistently earned this amount. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns.

What We Can Learn From Kikkoman's ROCE

The main thing to remember is that Kikkoman has proven its ability to continually reinvest at respectable rates of return. In light of this, the stock has only gained 0.7% over the last five years for shareholders who have owned the stock in this period. So to determine if Kikkoman is a multi-bagger going forward, we'd suggest digging deeper into the company's other fundamentals.

Kikkoman could be trading at an attractive price in other respects, so you might find our free intrinsic value estimation for 2801 on our platform quite valuable.

While Kikkoman 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.