Investors Could Be Concerned With Hotel Properties' (SGX:H15) Returns On Capital

Investors Could Be Concerned With Hotel Properties' (SGX:H15) Returns On Capital

Simply Wall St ·  2023/09/28 19:12

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. However, after briefly looking over the numbers, we don't think Hotel Properties (SGX:H15) has the makings of a multi-bagger going forward, but let's have a look at why that may be.


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. To calculate this metric for Hotel Properties, this is the formula:

对于那些不知道的人来说,ROCE是一家公司的年度税前利润(其回报)相对于业务资本的衡量标准。要计算Hotel Properties的此指标,请使用以下公式:

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


0.017 = S$59m ÷ (S$3.8b - S$287m) (Based on the trailing twelve months to June 2023).

0.017美元=S 5900万美元(S 38亿美元-S 2.87亿美元)(根据截至2023年6月的往绩12个月计算)

Therefore, Hotel Properties has an ROCE of 1.7%. Ultimately, that's a low return and it under-performs the Hospitality industry average of 3.9%.

所以呢,Hotel Properties的净资产收益率为1.7%。归根结底,这是一个较低的回报率,表现逊于3.9%的酒店业平均水平。

Check out our latest analysis for Hotel Properties


SGX:H15 Return on Capital Employed September 28th 2023
新加坡交易所:H15 2023年9月28日的资本回报率

In the above chart we have measured Hotel Properties' 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 Hotel Properties here for free.

在上面的图表中,我们衡量了Hotel Properties之前的净资产收益率(ROCE)和之前的表现,但可以说,未来更重要。如果您愿意,您可以查看此处涵盖Hotel Properties的分析师的预测免费的。

What The Trend Of ROCE Can Tell Us


In terms of Hotel Properties' historical ROCE movements, the trend isn't fantastic. Around five years ago the returns on capital were 2.8%, but since then they've fallen to 1.7%. Although, given both revenue and the amount of assets employed in the business have increased, it could suggest the company is investing in growth, and the extra capital has led to a short-term reduction in ROCE. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run.


In Conclusion...


While returns have fallen for Hotel Properties in recent times, we're encouraged to see that sales are growing and that the business is reinvesting in its operations. These trends are starting to be recognized by investors since the stock has delivered a 2.4% gain to shareholders who've held over the last five years. So this stock may still be an appealing investment opportunity, if other fundamentals prove to be sound.


One final note, you should learn about the 2 warning signs we've spotted with Hotel Properties (including 1 which can't be ignored) .

最后一个注意事项,您应该了解2个警告标志我们已经发现了Hotel Properties(包括1家不容忽视的酒店)。

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.


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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.

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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。

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