ROIC Analysis Hub: Complete Return on Invested Capital Research Library
Return on Invested Capital (ROIC) measures how efficiently a company turns invested capital into profit. Our ROIC research library covers sector benchmarks from 938 companies and detailed peer comparisons across 8 industries—everything you need to identify high-quality stocks.
ROIC Analysis Hub
Your central resource for Return on Invested Capital research
Return on Invested Capital (ROIC) measures how efficiently a company generates profit from capital invested in its operations. Unlike P/E ratios, ROIC works across most sectors and reveals durable competitive advantages.
Quick Navigation: Jump to Sector Benchmarks | Peer Comparisons | Screening Framework
Start Here: The Definitive Guide
For a complete 3,200-word framework covering ROIC calculation methodology, 938-company sector benchmarks, and the 8-quarter diagnostic system, read our comprehensive guide:
ROIC: The Complete Investor's Guide — Everything you need to master Return on Invested Capital analysis
What You'll Find Here
Our ROIC research library includes:
- Sector Benchmarks from 938 S&P 500 companies
- Peer Comparisons across 8+ industries with 8-quarter trend analysis
- Screening Frameworks to find high-quality stocks in 30 minutes
- Incremental ROIC analysis revealing which companies are strengthening vs eroding their moats
Featured: ROIC Screening Framework
Start here if you're new to ROIC analysis.
Our foundational guide covers why sector context matters more than absolute thresholds—41.2% of companies exceed 15% ROIC, but they're not all quality investments.
ROIC Stock Screening Framework with Sector Benchmarks
Key insights:
- 938-company benchmark data across 6 sectors
- 5-step framework to screen 500+ companies in 30 minutes
- Why retail median (15.9%) vs utilities (5.7%) shows 2.8x sector variation
- Real examples: Home Depot (27.2%) vs Kroger (7.5%)—both retail, vastly different quality
Sector Benchmarks
Never compare ROIC across sectors. Use these benchmarks from our 938-company analysis:
| Sector | Median ROIC | P25 | P75 | Notes |
|---|---|---|---|---|
| Technology | 18-25% | 12% | 30%+ | R&D distorts; use caution |
| Retail | 15.9% | 9% | 24% | Membership models drive premium |
| Manufacturing | 11.2% | 6% | 18% | Capital intensity varies |
| Healthcare | 12-18% | 8% | 25% | Pharma vs services split |
| Utilities | 5.7% | 4% | 8% | Regulated returns |
| Energy | 8-15% | 4% | 20% | Commodity cycle dependent |
Practical tip: A "good" ROIC in utilities (10%+) would be mediocre in retail (15%+). Always use sector-specific thresholds.
Peer Comparisons by Industry
Defense Contractors
Defense Contractor ROIC Rankings: LMT, RTX, NOC, GD Analysis
- LMT leads at 30.1% ROIC but trajectory is declining (-0.018)
- NOC has highest incremental ROIC (31.3%)—B-21 generating exceptional returns
- RTX improving post-merger (+0.004 trajectory)
- GD offers safest dividend with 5.4% FCF yield
Semiconductors
Semiconductor ROIC Rankings: QCOM's Licensing Moat vs Peers
- AVGO leads with 46.7% ROIC (software + semiconductor mix)
- QCOM's licensing segment earns 72% margin
- AMD improving from 2.9% to 5.3%
- TXN declining 15.6pp (37.4% → 21.8%)
Semiconductor Equipment ROIC Rankings: KLA, AMAT, LRCX, ASML
- KLA leads semiconductor equipment at 38.2% ROIC
- ASML's unique EUV monopoly delivers 25%+ ROIC
- Equipment makers more cyclical than chip designers
Retail
Retail ROIC Comparison: Costco vs Walmart Membership Advantage
- Costco's membership model drives 25%+ ROIC
- Walmart's e-commerce investments impacting near-term capital efficiency
- Membership revenue = high-margin recurring profit
Energy (E&P)
E&P ROIC Rankings: Devon vs ConocoPhillips vs Exxon
- Integrated majors (XOM) more stable ROIC through cycles
- Pure-play E&P (DVN) higher peak ROIC but more volatile
- Capital discipline post-2020 improving sector-wide returns
Pharmaceuticals
Eli Lilly vs AbbVie ROIC: GLP-1 Dominance vs Patent Cliff
- LLY's Mounjaro/Zepbound driving margin expansion
- ABBV facing Humira patent cliff pressure
- Pharma ROIC heavily dependent on pipeline success
Novo Nordisk vs Eli Lilly: GLP-1 Margin Comparison
- Head-to-head profitability analysis of GLP-1 leaders
- Manufacturing scale and pricing power comparison
Industrials
Honeywell ROIC Analysis: Pre-Spin-Off Segment Performance
- Aerospace segment ROIC significantly higher than building technologies
- Spin-off may unlock segment-specific valuations
- Conglomerate discount hiding quality assets
SaaS / Software
SaaS Segment Divergence: Adobe vs Salesforce vs ServiceNow vs Intuit
- Intuit's consumer segment ROIC vs enterprise products
- Adobe's Creative Cloud margin contribution
- SaaS models typically generate high ROIC after scale
Adobe's ROIC Paradox: Why Accounting Metrics Miss the Story
- ADBE's capital efficiency under the hood
- How SBC and intangibles distort traditional metrics
Ad-Tech
AppLovin's 75% ROIC: AI Ad-Tech Crushing Unity and Trade Desk
- APP's AXON AI driving extraordinary capital efficiency
- Unity struggling post-merger
- Trade Desk's DSP model capital-light
Auto Retail
Auto Retail ROIC: Carvana vs CarMax Turnaround Comparison
- CVNA's rapid turnaround from near-bankruptcy
- Traditional dealer models (KMX) more stable but lower peaks
- Inventory financing key to auto retail ROIC
Homebuilders
Homebuilder ROIC: NVR vs Lennar vs D.R. Horton Margin Paradox
- NVR's land-light model drives industry-leading ROIC
- Why lower gross margins can still produce higher returns on capital
- Capital allocation strategies in cyclical housing
Consumer & Franchise
Yum Brands' Negative Equity ROIC: The Franchise Model Anomaly
- How franchise models create negative equity situations
- Why traditional ROIC calculations break down for asset-light franchisors
- Alternative capital efficiency metrics for franchise businesses
Technology Hardware
SanDisk Storage Sector Recovery Analysis
- Storage sector ROIC through cyclical recovery
- Volume vs pricing dynamics in memory markets
Semiconductor FCF Conversion: ARM, TSM, Intel
- Cash flow quality comparison across chip business models
- Fabless vs foundry vs IDM capital efficiency
Semiconductor Equipment Hidden Signals: AMAT, KLAC
- ROIC signals in equipment spending cycles
- Leading indicators from semi equipment orders
How to Use This Research
-
Start with benchmarks — Understand what "good" means in your target sector using our screening framework
-
Compare peers — Read the relevant industry comparison to see 8-quarter trends
-
Check incremental ROIC — High historical ROIC + low incremental ROIC = eroding moat
-
Apply to your watchlist — Use our screener with sector-adjusted thresholds
Pro tip: ROIC direction matters more than level. A company improving from 8% to 12% ROIC often outperforms one declining from 25% to 20%.
Related Tools
- ROIC Stock Screener — Filter by ROIC with sector benchmarks
- Peer Comparison Tool — Compare any companies side-by-side
- Company Analysis — Individual company ROIC analysis
Keep Learning
This hub is updated as new peer comparisons are published. Current coverage: 11 posts across 8 industries.
Coming soon: ROIC analysis for airlines, consumer staples, and healthcare services.
In This Series (19 articles)
ROIC, Done Right: Sector Benchmarks from 938 Companies (and Why a Flat 15% Lies)
A flat 15%-is-good ROIC rule misleads — utilities median 5.7%, retail 15.9%. Here is the ROIC reference with the calculation, the adjustment traps, and sector benchmarks from 938 companies, framed so a screen is sector-adjusted.
Sector-Adjusted ROIC Screening: The 938-Company Benchmark Dataset
A flat ROIC cutoff buries good utilities and flatters mediocre retailers. Here is the 938-company sector-benchmark dataset (retail 15.9% vs utilities 5.7%) and a sector-adjusted 5-step screen you can reproduce.
Peer Comparison as a Data Surface: 20 Metrics x 8 Quarters, Sector-Normalized
Point-in-time peer tables miss the trajectory. Here is the peer-comparison surface — 20+ metrics across 8 quarters of history, sector-normalized and SEC-backed — and why the temporal dimension is what makes a comparison decision-grade.
Defense Stocks 2025: LMT's ROIC Declining While RTX Improves (8Q Data)
Wall Street ranks Lockheed Martin's 30% ROIC as best-in-class. But our 8-quarter trajectory analysis reveals LMT's capital efficiency is actually declining (-0.018 trend) while RTX improves (+0.004). The data suggests the market may be mispricing defense contractor quality.
Semiconductor Equipment ROIC: Why KLA's 43% Returns Have a Catch
KLA Corporation delivers 43% ROIC—highest in semiconductor equipment. But SEC filings reveal 33% China revenue concentration, DOJ export investigations, and rare earth supply risks. Our DuPont analysis shows KLAC's zero-debt, asset-light model drives returns, while ASML's 75% invested capital growth explains its ROIC decline. Lam Research emerges as the 'boring winner' with stable returns and minimal risk.
Semiconductor Equipment: What ROIC Doesn't Tell You About AMAT's Risk
The semiconductor equipment ROIC spread (LRCX 54% vs AMAT 27%) is observable in any screener. But SEC filings reveal four hidden signals: AMAT faces TWO government investigations plus $181M restructuring, KLAC's AI packaging segment grew 37% with 401bps margin expansion (proving AI demand is real), LRCX's cash conversion is declining -23.7% (hidden stress beneath high ROIC), and ASML's 4-customer concentration creates feast-or-famine cycles.
Retail ROIC Rankings: Why Costco's 3% Margins Beat Walmart's
Walmart's net margin is actually higher than Costco's (3.96% vs 2.97%). But Costco's ROIC is 2x higher (41.2% vs 20.9%). The difference isn't profit margin—it's asset turnover. Here's the DuPont decomposition of retail capital efficiency.
Consumer Staples ROIC Rankings: Why the Lowest-ROIC Stock Has the Best Trajectory
CL has the highest ROIC (34.4%), yet PG—with the lowest ROIC (23.9%)—shows the strongest improvement trajectory (+21.6% over 8 quarters). Meanwhile, KO's superior cash generation masks a $12 billion tax liability. Here's how to read beyond the headline metrics.
Payment Network ROIC Rankings: Why Mastercard's 78% Beats Visa's 36% (It's Not What You Think)
The conventional wisdom says Visa is the safer, higher-quality payment stock. Our ROIC analysis tells a different story: Mastercard's 78% ROIC dwarfs Visa's 36%, and the reason reveals something important about how to read these metrics.
E&P ROIC Rankings: Why Devon, ConocoPhillips Beat ExxonMobil by 4x
Devon Energy generated 48% ROIC in Q3 2025. ExxonMobil generated 11%. Both produce oil and gas. Why the 4.5x difference? The answer lies in capital allocation: XOM returns 73% of FCF as dividends while pure E&P operators reinvest in high-return wells.
ConocoPhillips vs Chevron: Why COP's $8.5B Venezuela Claims Beat CVX's Zero-Reserve Operations
The market bet on CVX after Maduro's arrest, but the data reveals COP's pure E&P model (29.9% ROIC) plus $8.5B in claims creates asymmetric upside. Chevron books zero proved reserves in Venezuela despite being the only US operator. Which exposure would you rather have?
The Homebuilder ROIC Paradox: Why NVR's 35% Returns Beat LEN's 9%
Wall Street treats homebuilders as a monolithic 'housing play.' But our analysis reveals a 4x ROIC spread (NVR 35% vs LEN 9%) that cannot be explained by margins alone. The divergence stems from three structural factors: NVR's asset-light lot model vs LEN's Millrose spin-off creating structural margin compression, DHI's $26B in specific performance land contracts creating downside asymmetry, and NVR's paradoxically 'cautious' guidance signaling genuine competitive strength.
AppLovin's 75% ROIC: AI Ad-Tech Crushing Unity and Trade Desk
AppLovin's ROIC went from 4.5% to 75% in 2.5 years while revenue growth accelerated from +17% to +86%. Meanwhile, Unity's ironSource merger resulted in -9% ROIC and declining revenue. The data reveals one of the most dramatic capital efficiency divergences in tech history.
Novo Nordisk vs Eli Lilly: Why NVO Converts More Revenue to Profit
Novo Nordisk outearns Eli Lilly on every margin metric: 84.7% gross margin vs 82.9%, 44.2% operating margin vs 44.4%, and 41.7% FCF margin vs ~27%. Yet LLY's 52% ROIC far exceeds NVO's—which appears as an anomalous -3.6%. This isn't a data error: NVO's negative invested capital reveals an extraordinarily asset-light business model where the standard ROIC formula breaks down. For margin-focused investors, NVO wins. For capital efficiency purists, LLY dominates.
Medical Device ROIC Rankings: Why Abbott's 26% Beats Medtronic's 7% (The Gross Margin Paradox)
Boston Scientific has 69% gross margins. Abbott has 56%. Yet Abbott's ROIC is 2.6x higher. This paradox reveals something fundamental about capital efficiency in medical devices—and why screening for 'high margin' stocks can lead you astray.
What ISRG's 21.6% ROIC Reveals: Surgical Robotics Moat Under the Microscope
Intuitive Surgical generates 3x the returns on capital of Medtronic and Stryker. DuPont decomposition reveals ISRG wins on both NOPAT margin (25.6% vs 15%) AND capital turnover (0.84x vs 0.49x) — a rare double advantage. The counter-intuitive finding: high stock compensation actually understates their operating efficiency.
YUM's 51% ROIC with -$7.5B Equity: Franchise Model Paradox
Yum Brands' shareholder equity is -$7.5 billion. Yet its ROIC is 50.8% - 2.2x McDonald's 22.8%. This isn't financial engineering. It's the byproduct of franchise economics: when a business doesn't need capital, it returns excess to shareholders. We break down the mechanism behind negative equity in asset-light models.
Storage Sector Recovery: Why SanDisk's Volume Surge (+31%) Matters More Than Q3 Margins
SanDisk's +569% stock surge looks disconnected from -17% TTM ROIC, but the real story is in the cycle fundamentals: +31% bit shipment growth overwhelming -9% ASP normalization, gross margins inflecting at +7.4pp/quarter, and positive FCF despite transition losses. This is textbook early-cycle recovery, not a bubble.
Jabil vs Celestica 2026: Two Paths to ROIC Excellence in AI Infrastructure
Both Jabil (29% ROIC) and Celestica (39% ROIC) rank among the best capital allocators in EMS. But DuPont decomposition reveals they get there through opposite mechanisms — JBL wins on turnover (13x), CLS wins on margin (10.2%). The counter-intuitive finding: CLS has better metrics AND faster growth, yet trades at an apparent discount. Here's what the data reveals.
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