FMP
Franklin Covey Co. (NYSE:FC) Outshines Peers in Capital Efficiency
Jan 9, 2025 12:00 PM - Danny Green(Last modified: Jan 10, 2025 9:04 AM)
Image credit: Google Images
- Franklin Covey Co. boasts a remarkable Return on Invested Capital (ROIC) of 43.94%, significantly surpassing its Weighted Average Cost of Capital (WACC) of 10.33%.
- The company's ROIC to WACC ratio of 4.25 indicates it is generating returns well above its cost of capital, suggesting strong value creation for shareholders.
- Compared to peers like CRA International, Inc. (CRAI) and Thermon Group Holdings, Inc. (THR), Franklin Covey Co. demonstrates superior capital efficiency, positioning it as a leader among its competitors.
Franklin Covey Co. (NYSE:FC) is a global company specializing in performance improvement. It offers training and consulting services to help organizations achieve results that require a change in human behavior. The company operates in a competitive landscape with peers like CRA International, Inc. (CRAI), Thermon Group Holdings, Inc. (THR), Forrester Research, Inc. (FORR), Forestar Group Inc. (FOR), and Alamo Group Inc. (ALG).
Franklin Covey Co. boasts a remarkable Return on Invested Capital (ROIC) of 43.94%, significantly surpassing its Weighted Average Cost of Capital (WACC) of 10.33%. This results in a ROIC to WACC ratio of 4.25, indicating that the company is generating returns well above its cost of capital. This efficiency in capital utilization suggests strong value creation for shareholders.
In comparison, CRA International, Inc. (CRAI) has a ROIC of 16.81% and a WACC of 9.29%, resulting in a ROIC to WACC ratio of 1.81. While CRAI is the most efficient among its peers, Franklin Covey Co. still outshines with its superior ratio, highlighting its exceptional capital efficiency.
Thermon Group Holdings, Inc. (THR) and Forestar Group Inc. (FOR) have ROIC to WACC ratios of 0.94 and 0.84, respectively, indicating that their returns are below their cost of capital. Forrester Research, Inc. (FORR) presents a negative ROIC of -59.12% against a WACC of 7.39%, resulting in a ROIC to WACC ratio of -8.00, suggesting significant inefficiencies.
Alamo Group Inc. (ALG) shows a ROIC of 10.83% and a WACC of 9.34%, leading to a ROIC to WACC ratio of 1.16. While ALG is generating returns above its cost of capital, it still falls short compared to Franklin Covey Co.'s impressive performance. This positions Franklin Covey Co. as a leader in capital efficiency among its peers.
Other Blogs
May 27, 2024 3:30 PM - Rajnish Katharotiya
The best 5 GPU stocks other than NVDA
In the ever-evolving world of technology, certain sectors have consistently demonstrated exceptional growth and innovation. The graphics processing units (GPUs) industry is one such sector, offering investors a golden opportunity for potentially high returns. In this blog, we'll delve into why inves...
Jun 6, 2024 2:47 AM - Parth Sanghvi
ROE vs ROA: Which Metric is More Important for Investors?
ROE vs. ROA: Which Metric is More Important for Investors? When evaluating a company's financial performance, investors often rely on various metrics to gauge profitability and efficiency. Two commonly discussed metrics are Return on Equity (ROE) and Return on Assets (ROA). Understanding the diff...
Jun 6, 2024 2:57 AM - Parth Sanghvi
DCF vs NPV: Which Valuation Method Should You Use?
When it comes to valuing an investment or a business, two of the most commonly used methods are Discounted Cash Flow (DCF) and Net Present Value (NPV). Both methods are essential tools in finance, but they serve slightly different purposes and are used in different contexts. This guide will explore ...
