UCB SA's (EBR:UCB) Stock Is Going Strong: Have Financials A Role To Play?

UCB's (EBR:UCB) stock is up by a considerable 8.8% over the past week. As most would know, fundamentals are what usually guide market price movements over the long-term, so we decided to look at the company's key financial indicators today to determine if they have any role to play in the recent price movement. In this article, we decided to focus on UCB's ROE. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Put another way, it reveals the company's success at turning shareholder investments into profits. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. How Is ROE Calculated? The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for UCB is:14% = €1.3b ÷ €9.7b (Based on the trailing twelve months to June 2025). The 'return' is the profit over the last twelve months. Another way to think of that is that for every €1 worth of equity, the company was able to earn €0.14 in profit. View our latest analysis for UCB Why Is ROE Important For Earnings Growth? Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. UCB's Earnings Growth And 14% ROE To begin with, UCB seems to have a respectable ROE. Even when compared to the industry average of 13% the company's ROE looks quite decent. However, we are curious as to how UCB's decent returns still resulted in flat growth for UCB in the past five years. So, there could be some other aspects that could potentially be preventing the company from growing. For example, it could be that the company has a high payout ratio or the business has allocated capital poorly, for instance. Next, on comparing with the industry net income growth, we found that the industry grew its earnings by 9.9% over the last few years. ENXTBR:UCB Past Earnings Growth January 12th 2026 The basis for attaching value to a company is, to a great extent, tied to its earnings growth. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is UCB fairly valued compared to other companies? These 3 valuation measures might help you decide. Is UCB Making Efficient Use Of Its Profits? UCB has a high three-year median payout ratio of 60% (or a retention ratio of 40%), meaning that the company is paying most of its profits as dividends to its shareholders. This does go some way in explaining why there's been no growth in its earnings. In addition, UCB has been paying dividends over a period of at least ten years suggesting that keeping up dividend payments is way more important to the management even if it comes at the cost of business growth. Our latest analyst data shows that the future payout ratio of the company is expected to drop to 12% over the next three years. Regardless, the ROE is not expected to change much for the company despite the lower expected payout ratio. Summary Overall, we feel that UCB certainly does have some positive factors to consider. Although, we are disappointed to see a lack of growth in earnings even in spite of a high ROE. Bear in mind, the company reinvests a small portion of its profits, which means that investors aren't reaping the benefits of the high rate of return. That being so, the latest industry analyst forecasts show that the analysts are expecting to see a huge improvement in the company's earnings growth rate. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.