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Reunert (JSE:RLO) Hasn't Managed To Accelerate Its Returns
What trends should we look for it we want to identify stocks that can multiply in value over the long term? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. That's why when we briefly looked at Reunert's (JSE:RLO) ROCE trend, we were pretty happy with what we saw. 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. What Is Return On Capital Employed (ROCE)? If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on Reunert is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.15 = R1.4b ÷ (R12b - R3.0b) (Based on the trailing twelve months to March 2025). Thus, Reunert has an ROCE of 15%. In absolute terms, that's a satisfactory return, but compared to the Industrials industry average of 10% it's much better. View our latest analysis for Reunert In the above chart we have measured Reunert's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free analyst report for Reunert . What Does the ROCE Trend For Reunert Tell Us? While the current returns on capital are decent, they haven't changed much. The company has consistently earned 15% for the last five years, and the capital employed within the business has risen 38% in that time. Since 15% is a moderate ROCE though, it's good to see a business can continue to reinvest at these decent rates of return. 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. Our Take On Reunert's ROCE The main thing to remember is that Reunert has proven its ability to continually reinvest at respectable rates of return. And the stock has done incredibly well with a 133% return over the last five years, so long term investors are no doubt ecstatic with that result. So while investors seem to be recognizing these promising trends, we still believe the stock deserves further research. One more thing to note, we've identified 1 warning sign with Reunert and understanding it should be part of your investment process. While Reunert isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Invicta Holdings Limited (JSE:IVT) Looks Interesting, And It's About To Pay A Dividend
Invicta Holdings Limited (JSE:IVT) stock is about to trade ex-dividend in three days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. In other words, investors can purchase Invicta Holdings' shares before the 20th of August in order to be eligible for the dividend, which will be paid on the 25th of August. The company's next dividend payment will be R01.15 per share, and in the last 12 months, the company paid a total of R1.15 per share. Looking at the last 12 months of distributions, Invicta Holdings has a trailing yield of approximately 3.3% on its current stock price of R034.98. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing. 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. If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Invicta Holdings paid out just 15% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Dividends consumed 51% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations. It's positive to see that Invicta Holdings's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut. Check out our latest analysis for Invicta Holdings Click here to see how much of its profit Invicta Holdings paid out over the last 12 months. Have Earnings And Dividends Been Growing? Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Invicta Holdings's earnings have been skyrocketing, up 49% per annum for the past five years. The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Invicta Holdings has seen its dividend decline 8.1% per annum on average over the past 10 years, which is not great to see. Invicta Holdings is a rare case where dividends have been decreasing at the same time as earnings per share have been improving. It's unusual to see, and could point to unstable conditions in the core business, or more rarely an intensified focus on reinvesting profits. The Bottom Line Is Invicta Holdings worth buying for its dividend? Earnings per share have grown at a nice rate in recent times and over the last year, Invicta Holdings paid out less than half its earnings and a bit over half its free cash flow. Overall we think this is an attractive combination and worthy of further research. Want to learn more about Invicta Holdings's dividend performance? Check out this visualisation of its historical revenue and earnings growth. Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
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Invicta Holdings Limited (JSE:IVT) Looks Interesting, And It's About To Pay A Dividend
Invicta Holdings Limited (JSE:IVT) stock is about to trade ex-dividend in three days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. In other words, investors can purchase Invicta Holdings' shares before the 20th of August in order to be eligible for the dividend, which will be paid on the 25th of August. The company's next dividend payment will be R01.15 per share, and in the last 12 months, the company paid a total of R1.15 per share. Looking at the last 12 months of distributions, Invicta Holdings has a trailing yield of approximately 3.3% on its current stock price of R034.98. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing. 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. If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Invicta Holdings paid out just 15% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Dividends consumed 51% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations. It's positive to see that Invicta Holdings's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut. Check out our latest analysis for Invicta Holdings Click here to see how much of its profit Invicta Holdings paid out over the last 12 months. Have Earnings And Dividends Been Growing? Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Invicta Holdings's earnings have been skyrocketing, up 49% per annum for the past five years. The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Invicta Holdings has seen its dividend decline 8.1% per annum on average over the past 10 years, which is not great to see. Invicta Holdings is a rare case where dividends have been decreasing at the same time as earnings per share have been improving. It's unusual to see, and could point to unstable conditions in the core business, or more rarely an intensified focus on reinvesting profits. The Bottom Line Is Invicta Holdings worth buying for its dividend? Earnings per share have grown at a nice rate in recent times and over the last year, Invicta Holdings paid out less than half its earnings and a bit over half its free cash flow. Overall we think this is an attractive combination and worthy of further research. Want to learn more about Invicta Holdings's dividend performance? Check out this visualisation of its historical revenue and earnings growth. Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
