FMP
Apr 17, 2025
Jefferies Financial Group Inc. (NYSE:JEF) is a diversified financial services company competing with firms like Raymond James Financial, Evercore, Stifel Financial, and Lazard within the financial services sector. This sector emphasizes capital efficiency and return on investment.
Jefferies boasts a Return on Invested Capital (ROIC) of 23.63% and a Weighted Average Cost of Capital (WACC) of 34.58%. However, its ROIC to WACC ratio of 0.68 suggests that the company's returns do not exceed its cost of capital, highlighting a potential need for reassessment of capital allocation strategies to enhance efficiency.
In contrast, Raymond James Financial (RJF) demonstrates a ROIC of 16.80% and a WACC of 12.73%, resulting in a ROIC to WACC ratio of 1.32. This indicates RJF's effective capital utilization, crucial for sustained growth and competitiveness in the financial sector.
Evercore Inc. (EVR) presents a scenario with a ROIC of 6.25% and a WACC of 9.38%, leading to a ROIC to WACC ratio of 0.67. Similar to Jefferies, Evercore's returns do not surpass its cost of capital, suggesting room for improvement in capital management strategies to enhance shareholder value.
Lastly, Louisiana-Pacific Corporation (LPX) stands out with a ROIC of 17.31% and a WACC of 12.08%, resulting in the highest ROIC to WACC ratio of 1.43 among the peers. This indicates LPX's effective capital utilization, highlighting its potential for value creation and growth.
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