Investors Could Be Concerned With dotdigital Group's (LON:DOTD) Returns On Capital
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount 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. However, after investigating dotdigital Group (LON:DOTD), we don't think it's current trends fit the mold of a multi-bagger.
AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.
Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. The formula for this calculation on dotdigital Group is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.12 = UK£13m ÷ (UK£127m - UK£18m) (Based on the trailing twelve months to December 2024).
Therefore, dotdigital Group has an ROCE of 12%. That's a pretty standard return and it's in line with the industry average of 12%.
View our latest analysis for dotdigital Group
Above you can see how the current ROCE for dotdigital Group compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for dotdigital Group .
When we looked at the ROCE trend at dotdigital Group, we didn't gain much confidence. To be more specific, ROCE has fallen from 24% over the last five years. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run.
While returns have fallen for dotdigital Group in recent times, we're encouraged to see that sales are growing and that the business is reinvesting in its operations. However, despite the promising trends, the stock has fallen 24% over the last five years, so there might be an opportunity here for astute investors. So we think it'd be worthwhile to look further into this stock given the trends look encouraging.
dotdigital Group could be trading at an attractive price in other respects, so you might find our on our platform quite valuable.
While dotdigital Group isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.
—
Investing narratives with Fair Values
Vita Life Sciences Set for a 12.72% Revenue Growth While Tackling Operational Challenges By Robbo – Community Contributor
Fair Value Estimated: A$2.42 · 0.1% Overvalued
Vossloh rides a €500 billion wave to boost growth and earnings in the next decade By Chris1 – Community Contributor
Fair Value Estimated: €78.41 · 0.1% Overvalued
Intuitive Surgical Will Transform Healthcare with 12% Revenue Growth By Unike – Community Contributor
Fair Value Estimated: $325.55 · 0.6% Undervalued
View more featured narratives
—
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.
Melden Sie sich an, um Ihr Portfolio aufzurufen.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
9 minutes ago
- Yahoo
British nationals urged to register for evacuation flights from Israel
The Government has urged Britons seeking to be evacuated from Israel and the Occupied Palestinian Territories to register their interest as it prepares for a flight early next week. It comes after the US attacked three nuclear sites in Iran overnight and Tehran then launched a ballistic missile barrage against Israel. The Foreign, Commonwealth and Development Office (FCDO) said on Sunday morning this is 'a perilous and volatile moment for the Middle East', and it continued to urge British nationals to register their details and interest in the flight. It said further flights 'will be considered depending on demand and the latest security situation'. The UK is preparing a flight to transport vulnerable British nationals and their dependants out of Israel and the OPTs early next week. British nationals in Israel and the OPTs should register their presence to receive the latest updates and register their interest in the… — Foreign, Commonwealth & Development Office (@FCDOGovUK) June 22, 2025 According to the Israeli Government, some 22,000 tourists are seeking to board evacuation flights. It is unclear how many of these are UK citizens. British nationals who have already registered will automatically be contacted and provided with a link to the booking portal, the FCDO said. Those eligible for the flight will be expected to pay for their seat – and payment will be taken on registration on the flight booking form. The FCDO added that those with 'greatest need' will be prioritised, and British nationals plus their non-British immediate family members travelling with them are eligible. All passengers must hold a valid travel document, and those non-British immediate family members will require valid visas/permission to enter or remain that was granted for more than six months, the FCDO said. The UK has been working on charter flights for Britons in Israel but none have so far taken off as the country's airspace has been closed. Business Secretary Jonathon Reynolds told Sky News on Sunday morning: 'We are in active conversations about chartering aircraft to get people out.' Asked if that will happen imminently, Mr Reynolds said: 'I believe our intention would be to do that as soon as possible… hours, not days.' Meanwhile, shadow foreign secretary Dame Priti Patel told Times Radio the UK 'must not be behind the curve' in evacuating its nationals. 'The Government's got to start moving fast now in terms of British nationals in Israel,' Dame Priti said. 'They've been talking about this for days… Israeli airspace is shut down. 'The Americans are ready to evacuate 25,000 US nationals — we must not be behind the curve.' The FCDO has warned British nationals not to make their way to the airport unless they are contacted. Register your presence: — Foreign, Commonwealth & Development Office (@FCDOGovUK) June 22, 2025 A spokesperson said: 'This is a perilous and volatile moment for the Middle East. 'The safety of British nationals in Israel and the Occupied Palestinian Territories continues to be our utmost priority – that's why the UK Government is preparing flights to help those wanting to leave. 'Working closely with the Israeli authorities, our staff are continuing to work at pace to assist British nationals on the ground and ensure they receive the support they need.' Commercial flights remain in operation from Egypt and Jordan to the UK, and international land border crossings to these countries remain open. The FCDO said the situation 'remains volatile' and the Government's ability to run flights out of Israel and the Occupied Palestinian Territories 'could change at short notice'. The portal to register presence in Israel as a Briton is available at:
Yahoo
13 minutes ago
- Yahoo
Fabrizio Romano confirms which striker is on Liverpool's transfer shortlist
Liverpool have got plans to add a high-quality striker to their squad this summer. Despite winning the Premier League title, Arne Slot and sporting director Richard Hughes are not standing still. Darwin Nunez and Diogo Jota never really convinced the Dutchman during his first season in charge and the transfer focus at Anfield will soon turn to a No9. Advertisement Several players have been linked - not least Victor Osimhen and Joao Pedro - but there are a couple of names standing out above all others. At the top of the list seems to be Alexander Isak. A deal would be difficult for the Sweden international - but confidence at the club will be sky-high after doing business with Bayer Leverkusen for Florian Wirtz. Then there's Hugo Ekitike. Fabrizio Romano reveals Liverpool striker hitlist It's been reported that Liverpool are concerned about Eintracht Frankfurt's high valuation. But given the Frenchman's output and his potential to develop further, €100m might well look reasonable in time. Advertisement Fabrizio Romano has now shared his view on what's likely to happen this summer as Liverpool go in search of a frontman. Isak's excessive valuation - around £120m and over - is probably going to be too much for Richard Hughes to get to. The Italian transfer supremo admits Liverpool WOULD indeed like to go for Isak but at the moment there are better opportunities for a No9 out there. © IMAGO - Hugo Ekitike Liverpool Isak 'a very, very difficult deal' 'Liverpool would try to go for Isak [if he became available] but at the moment I don't have this feeling,' he told GIVEMESPORT's Market Madness podcast. 'The club too, from what I'm hearing, see it as a very, very difficult deal.' Advertisement Instead, Romano believes Ekitike will come back into the frame. The Frankfurt forward scored 22 goals in all competitions last season - helping his side to achieve Champions League football. Frankfurt are well protected from a transfer fee perspective with Ekitike's contract lasting until 2029. Nonetheless this is not a transfer that Romano is ruling out. © IMAGO Ekitike 'an interesting opportunity' 'A name I can mention for Liverpool is still Hugo Ekitike at Eintracht Frankfurt,' the Italian transfer supremo continued. 'Because if Darwin Nunez leaves, let's see what happens with Luis Diaz, but especially Darwin, and I see Darwin leaving this summer. Advertisement 'Well, I think for Ekitike this could be a possibility to go to Liverpool, because there were calls from Chelsea two weeks ago. Man United, in recent days, also made contact with the agents to understand the situation. 'But for Liverpool, this is also a possibility. Liverpool also spoke to the agents. Also, Liverpool considered Ekitike an interesting opportunity. 'And so that's the name I would keep in their shortlist.'
Yahoo
15 minutes ago
- Yahoo
What 401(k) Investors Need to Know About Private Markets
Holly Verdeyen, partner and U.S. defined contribution leader at Mercer, joins WSJ's Take On the Week podcast to share why and how the addition of private assets to a retirement portfolio can affect long-term savers and what differentiates private assets from public assets like stocks and bonds.
