Summary:
BE Semiconductor Industries (AMS:BESI) is a company that has shown a trend of growing return on capital employed (ROCE) and a consistently expanding base of capital employed. This indicates a strong business model and profitable reinvestment opportunities. While the current ROCE is high, there has been a decrease in returns. However, with a ROCE of 27%, which outpaces the industry average, the company’s operations are still commendable.
Stability and Maturity:
Over the past five years, BE Semiconductor Industries has maintained stability in its capital employed and returns on that capital. This indicates that the company is in a mature phase and operates steadily without significant growth prospects. Although it may not be a company with the potential for explosive growth, the 27% return on capital is impressive. Shareholders have benefited from this stability, as the stock has delivered a remarkable 731% gain over the last five years.
Dividend and Risks:
Given the stable operations and decent returns, it is not surprising that BE Semiconductor Industries has been paying out 77% of its earnings as dividends to shareholders. Many investors hold the stock for its dividend. However, it is important to note that investing in the company does come with risks. Two warning signs were identified in an investment analysis, one of which is significant. Investors should consider these risks before making their investment decision.
The Bottom Line:
In summary, BE Semiconductor Industries may not be generating significant compound earnings, but it is still delivering steady returns on the capital employed. While the stock has performed exceptionally well over the last five years, the trajectory of the underlying trends suggests that it may not be a company with the potential for exponential growth in the future. Investors should assess the risks involved and consider the stability and dividend aspect of the company before making any investment decisions.
The source of the article is from the blog toumai.es