Bezeq The Israel Telecommunication: A Promising Growth Opportunity

Finding a business with the potential for substantial growth is challenging but not impossible when considering key financial metrics. One such metric is the return on capital employed (ROCE) and the growth in the base of capital employed. These metrics demonstrate how a company reinvests profits at increasing rates of return.

In the case of Bezeq The Israel Telecommunication (TLV:BEZQ), there have been notable changes in its returns on capital. With an ROCE of 17%, Bezeq has outperformed the Telecom industry’s average of 11%.

ROCE is a metric used to evaluate the percentage of pre-tax income a company earns on its invested capital. Bezeq’s ROCE is calculated by dividing its earnings before interest and tax (EBIT) by the difference between total assets and current liabilities.

The trend of Bezeq’s ROCE is impressive, with a 28% increase in returns over the past five years. This indicates that the company is generating more earnings per dollar of capital employed. Additionally, Bezeq has been achieving more with less capital, using 24% less capital to run its operations.

Considering Bezeq has delivered a 32% return to its shareholders over the last five years, it suggests that the stock may be undervalued, and investors may not be fully aware of its promising growth potential.

While these findings are promising, it is important to note that further research is recommended. There may be additional factors to consider, and it’s always prudent to assess the company’s financial health, fair value estimates, risks, and warnings.

Please note that this article by Simply Wall St is based on historical data and analyst forecasts and should not be considered as financial advice.