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. Ultimately, this demonstrates that it’s a business that is reinvesting profits at increasing rates of return. Having said that, from a first glance at Okinawa Cellular Telephone (TSE:9436) we aren’t jumping out of our chairs at how returns are trending, but let’s have a deeper look.
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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 Okinawa Cellular Telephone:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)
0.18 = JP¥18b ÷ (JP¥115b – JP¥14b) (Based on the trailing twelve months to June 2025).
Therefore, Okinawa Cellular Telephone has an ROCE of 18%. In absolute terms, that’s a satisfactory return, but compared to the Wireless Telecom industry average of 12% it’s much better.
View our latest analysis for Okinawa Cellular Telephone
TSE:9436 Return on Capital Employed August 25th 2025
Above you can see how the current ROCE for Okinawa Cellular Telephone compares to its prior returns on capital, but there’s only so much you can tell from the past. If you’d like, you can check out the forecasts from the analysts covering Okinawa Cellular Telephone for free.
What Does the ROCE Trend For Okinawa Cellular Telephone Tell Us?
There hasn’t been much to report for Okinawa Cellular Telephone’s returns and its level of capital employed because both metrics have been steady for the past five years. Businesses with these traits tend to be mature and steady operations because they’re past the growth phase. So unless we see a substantial change at Okinawa Cellular Telephone in terms of ROCE and additional investments being made, we wouldn’t hold our breath on it being a multi-bagger.
The Bottom Line
In a nutshell, Okinawa Cellular Telephone has been trudging along with the same returns from the same amount of capital over the last five years. Investors must think there’s better things to come because the stock has knocked it out of the park, delivering a 191% gain to shareholders who have held over the last five years. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn’t high.
While Okinawa Cellular Telephone doesn’t shine too bright in this respect, it’s still worth seeing if the company is trading at attractive prices. You can find that out with our FREE intrinsic value estimation for 9436 on our platform.
For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high 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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