For quality investors, the Return On Invested Capital (ROIC) is one of the most important financial metrics.A high ROIC is key for value creation and it’s a great way to look at a company’s competitive advantage.
Thank you for making this article available. With real estate investments, we call ROIC>WACC
Positive Leverage (cost of borrowing is less than the CAP rate or reverse of P/E). Think of a bank with the ability to borrow from the FED at a discount rate of say 2% and buy US Treasuries that yield 4%.
Excelente artículo, muy didáctido y muy bien expuesto. Pero me queda una duda y, he echado de menos si hay alguna trampa en el ROIC y cómo detectarla. Por lo demás excelente y muchas gracias por el esfuerzo
Jan 7, 2023·edited Jan 7, 2023Liked by Compounding Quality
Thanks for the absolutly great sharing!
Regarding potentially new articles. Comparing 2 real companies (A,B) with equivalent ROIC but the calculated WACC (from finanacial reports) shows one companie being a better investment than the other one?
Thanks for another great article explaining a key metric in a way that's easy for people to learn and understand. Big fan of anyone trying to make investing and financial planning more accessible to the masses!
Great article. Thanks!
Couple examples of high ROIC companies?
One of the best on the subject. Thanks for sharing.
Another awesome article. You have the gift of explaining things simply. Please keep it up.
Thanks for explaining how ROIC is a proxy for a moat.
Another great article, thank you very much !
Reverse Dcf
Thank you very much that helps me 👍
It's difficult not to bookmark every article you publish - thank you!
I have a question around datafeeds: I assume you don't compute the ROIC and WACC manually for each and every stock you look at.
Which datafeed do you pull ROIC and WACC from? (e.g. Bloomberg)
Do you doublecheck ROIC and/or WACC manually once you have shortlisted a stock via datafeed?
In your experience, are there any high-quality datafeeds around also for retail investors?
Thank you in advance for your advice.
Thank you for making this article available. With real estate investments, we call ROIC>WACC
Positive Leverage (cost of borrowing is less than the CAP rate or reverse of P/E). Think of a bank with the ability to borrow from the FED at a discount rate of say 2% and buy US Treasuries that yield 4%.
Oh my goodness, you are providing valuable information to all readers who don’t know financial knowledge,I really appreciate you
That's marvellous news, thanks for doing this!
Excelente artículo, muy didáctido y muy bien expuesto. Pero me queda una duda y, he echado de menos si hay alguna trampa en el ROIC y cómo detectarla. Por lo demás excelente y muchas gracias por el esfuerzo
Excellent thanks!
Could you write an article on valuation on growth, or to put it in another way: When to buy growth? 😃
Thanks for the absolutly great sharing!
Regarding potentially new articles. Comparing 2 real companies (A,B) with equivalent ROIC but the calculated WACC (from finanacial reports) shows one companie being a better investment than the other one?
Thanks for another great article explaining a key metric in a way that's easy for people to learn and understand. Big fan of anyone trying to make investing and financial planning more accessible to the masses!