Brambles (ASX: BXB): The 21% Return on Capital Machine You Can’t Ignore

Let me tell you something, investors—when a company is delivering a 21% Return on Capital Employed (ROCE) in an era of global economic uncertainty, that’s not a coincidence. That’s a blueprint for profit. Brambles Limited (BXB) isn’t just beating the market—it’s burying the competition. Let me break down why this logistics giant is a must-watch stock right now.

The ROCE Advantage: Double the Industry, Double the Value

Brambles isn’t just good at what it does—it’s 2x better than its peers. Its 21% ROCE (calculated using EBIT of US$1.3 billion divided by capital employed) crushes the industry average of 11%. This isn’t a flash in the pan either: over the past five years, ROCE has jumped 53%, all while capital employed has stayed flat. That’s the sign of a company mastering its operational DNA.

How They’re Doing It: Automation, Sustainability, and Smarts

Brambles’ secret? Automation and the circular economy. Its Shaping Our Future program is a game-changer: digitizing assets, automating service centers, and slashing waste. Think of it like this—every time Brambles reuses a pallet or crate (its core business), it’s not just saving materials—it’s saving capital.

The Zero Waste World (ZWW) initiative is another ace up their sleeve. By partnering with customers to eliminate empty transport miles and optimize supply chains, Brambles is turning logistics into a capital-light, high-margin game.

The Financial Playbook: Dividends, Buybacks, and Flexibility

Brambles isn’t just about profits—it’s about returning cash to shareholders. With a 50–70% dividend payout ratio and a proposed US$500 million buyback in 2025, this is a company that’s serious about rewarding investors. And with a leverage ratio of just 1.12x (well below its 1.5x–2.0x target), it’s got ammo in the chamber for growth or share buybacks.

The Risks? Manageable, Not Dealbreakers

Sure, there are speed bumps. Franking credits might dilute dividends as global operations grow, and acquisitions are scarce in their niche. But let’s be real: when a company is generating high-teens ROCE with minimal capital reinvestment, those risks are noise compared to the signal.

Bottom Line: This Is a Stock Built to Last

Brambles isn’t just surviving—it’s thriving. With 750+ service centers across 60+ countries, a circular business model that’s recession-proof, and returns that double the competition, this is a once-in-a-decade opportunity.

Here’s the math:
- 21% ROCE means every dollar of capital is working harder.
- A 53% ROCE increase in 5 years shows sustained discipline.
- US$500M buyback + 50–70% dividends = value creation on steroids.

This isn’t a fad—it’s a capital efficiency juggernaut. If you’re looking for a stock that delivers real, durable returns, BXB is your ticket.

Action Alert: Brambles (BXB) is a buy now. Let that 21% ROCE work for your portfolio.

Final Thought: In a world where most companies are lucky to hit 10% returns, Brambles is in a class of its own. This is a buy-and-hold stock that’s not just surviving—it’s rewriting the rules of logistics. Don’t miss the train.