If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. With that in mind, we’ve noticed some promising trends at Helix Energy Solutions Group (NYSE:HLX) so let’s look a bit deeper.
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. Analysts use this formula to calculate it for Helix Energy Solutions Group:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)
0.059 = US$137m ÷ (US$2.6b – US$323m) (Based on the trailing twelve months to March 2025).
So, Helix Energy Solutions Group has an ROCE of 5.9%. In absolute terms, that’s a low return and it also under-performs the Energy Services industry average of 11%.
Check out our latest analysis for Helix Energy Solutions Group
NYSE:HLX Return on Capital Employed July 20th 2025
Above you can see how the current ROCE for Helix Energy Solutions Group compares to its prior returns on capital, but there’s only so much you can tell from the past. If you’d like, you can check out the forecasts from the analysts covering Helix Energy Solutions Group for free.
Helix Energy Solutions Group’s ROCE growth is quite impressive. The figures show that over the last five years, ROCE has grown 148% whilst employing roughly the same amount of capital. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. On that front, things are looking good so it’s worth exploring what management has said about growth plans going forward.
As discussed above, Helix Energy Solutions Group appears to be getting more proficient at generating returns since capital employed has remained flat but earnings (before interest and tax) are up. Since the stock has only returned 36% to shareholders over the last five years, the promising fundamentals may not be recognized yet by investors. So with that in mind, we think the stock deserves further research.
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