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 (27 articles)
ROIC: The Complete Investor Guide to Return on Invested Capital
ROIC measures how efficiently a company turns capital into profits. A good ROIC is 15%+ for most sectors, but utilities median is 5.7% while retail is 15.9%. This guide shows you exactly how to calculate, interpret, and screen for ROIC using original data from 938 companies.
ROIC Stock Screening: 938 Company Analysis Shows Why Sector Benchmarks Matter
Manual ROIC screening takes 4+ hours per session. Learn our 5-step framework with sector-specific benchmarks from 938 companies showing why retail median ROIC (15.9%) differs from utilities (5.7%). Screen 500+ companies in 30 minutes with sector-adjusted thresholds.
How to Compare Companies Side-by-Side: Free Peer Analysis Tool (20 Metrics + 8-Quarter Trends)
Compare any S&P 500 company against 10 competitors using 20+ metrics with 5-7 temporal dimensions each. MetricDuck's free peer comparison tool automates 3-5 hours of manual Excel work in 2 minutes with 8-quarter trends, YoY analysis, and SEC-backed data.
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 ROIC Rankings: QCOM's Licensing Moat vs Pure-Play Peers (2025)
Qualcomm's consolidated margins hide a secret: the QTL licensing segment earns 72% operating margin vs QCT hardware's 30%. When Apple moves fully to in-house modems, what happens to QCOM's profitability? Our semiconductor ROIC comparison reveals the answer.
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.
Semiconductor FCF Conversion: Why TSM Beats ARM Despite Lower Margins
ARM Holdings generates 97% gross margin—the highest in semiconductors. Yet only 4% reaches free cash flow. Taiwan Semiconductor earns 56% gross margin but converts 63% to FCF. Intel, despite $5.7 billion in CHIPS Act disbursements, still burns cash. We analyzed 20-F and 10-Q filings to explain these capital efficiency gaps.
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?
Honeywell ROIC Problem: What the Triple Spin-Off Won't Fix (2025)
Honeywell is spinning into THREE companies by 2026. But while management focuses on restructuring, ROIC has quietly declined from 26.3% to 19.4% over 8 quarters. Here's what's dragging down returns and which segments might escape the trap.
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.
Which SaaS Segments Are Growing Fastest? 4-Company Breakdown
Headline revenue growth hides segment-level divergence. ServiceNow has BOTH segments growing 20%+, while Salesforce professional services declined -5.7%. Which SaaS company has the healthiest segment mix?
Adobe's ROIC Doubled in 8 Quarters: The Capital Turnover Story
Adobe's ROIC didn't just beat peers—it doubled in 8 quarters. The story isn't 'Adobe has high ROIC.' It's WHY it improved from 50% to 105% while Salesforce stayed at 12%. DuPont decomposition reveals the answer.
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.
Eli Lilly's 52% ROIC: GLP-1 Growth Engine vs AbbVie's Humira Cliff
Eli Lilly's ROIC doubled from 23% to 52% in 2.5 years as Mounjaro and Zepbound drove 54% revenue growth. Meanwhile, AbbVie's Humira declined 56% to biosimilar competition, testing whether Skyrizi and Rinvoq can fill a $20B revenue gap. This pharma divergence reveals how drug pipelines translate to capital efficiency.
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.
Hospital ROIC Varies 14x: Why Risk Velocity Matters More
Four hospital operators, four business models, 14x ROIC spread. HCA's scale generates 19.2% returns. THC's ambulatory surgery centers deliver 16.8% margins. UHS's behavioral health focus shows improving trends—but deteriorating litigation risk. CYH's rural model is structurally broken. Static ROIC analysis misses the risk velocity layer that determines which returns are sustainable.
CVNA vs KMX ROIC: Auto Retail Turnaround Analysis
Wall Street loves CVNA's +30% ROIC turnaround story. But our 8-quarter trajectory analysis reveals CarMax is in crisis mode: CEO fired December 2025, forced margin cuts, -8% volume decline. The data shows this isn't online vs traditional—it's about execution quality.
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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