Returns At J.B. Hunt Transport Services (NASDAQ:JBHT) Appear To Be Weighed Down
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. 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. That's why when we briefly looked at J.B. Hunt Transport Services' (NASDAQ:JBHT) ROCE trend, we were pretty happy with what we saw.
Return On Capital Employed (ROCE): What Is It?
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 J.B. Hunt Transport Services is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.13 = US$826m ÷ (US$8.1b - US$1.9b) (Based on the trailing twelve months to September 2025).
Thus, J.B. Hunt Transport Services has an ROCE of 13%. On its own, that's a standard return, however it's much better than the 9.7% generated by the Transportation industry.
See our latest analysis for J.B. Hunt Transport Services
Above you can see how the current ROCE for J.B. Hunt Transport Services compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for J.B. Hunt Transport Services .
How Are Returns Trending?
While the current returns on capital are decent, they haven't changed much. The company has consistently earned 13% for the last five years, and the capital employed within the business has risen 32% in that time. 13% is a pretty standard return, and it provides some comfort knowing that J.B. Hunt Transport Services has consistently earned this amount. Stable returns in this ballpark can be unexciting, but if they can be maintained over the long run, they often provide nice rewards to shareholders.
Our Take On J.B. Hunt Transport Services' ROCE
The main thing to remember is that J.B. Hunt Transport Services has proven its ability to continually reinvest at respectable rates of return. And given the stock has only risen 38% over the last five years, we'd suspect the market is beginning to recognize these trends. So to determine if J.B. Hunt Transport Services is a multi-bagger going forward, we'd suggest digging deeper into the company's other fundamentals.
On a separate note, we've found 2 warning signs for J.B. Hunt Transport Services you'll probably want to know about.
If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive 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.