FMP
Feb 21, 2025
Raymond James Financial, Inc. (NYSE:RJF) is a diversified financial services company providing a range of services including investment banking, asset management, and financial planning. The company competes with other financial institutions like W. R. Berkley Corporation, Northern Trust Corporation, Regency Centers Corporation, and Arthur J. Gallagher & Co.
RJF's Return on Invested Capital (ROIC) is 16.80%, which is significantly higher than its Weighted Average Cost of Capital (WACC) of 12.97%. This results in a ROIC to WACC ratio of 1.30, indicating that RJF is generating returns well above its cost of capital. This is a positive indicator for investors as it shows efficient capital utilization.
In comparison, W. R. Berkley Corporation (WRB) has a ROIC of 6.83% and a WACC of 7.12%, resulting in a ROIC to WACC ratio of 0.96. This suggests that WRB's returns are slightly below its cost of capital, which may concern investors looking for higher efficiency in capital use.
Northern Trust Corporation (NTRS) presents a more challenging scenario with a ROIC of 2.69% against a WACC of 17.02%, leading to a ROIC to WACC ratio of 0.16. This indicates that NTRS is not covering its cost of capital, which could be a red flag for potential investors.
Regency Centers Corporation (REG) and Arthur J. Gallagher & Co. (AJG) also show ROIC to WACC ratios below 1, at 0.29 and 0.48 respectively. This further highlights RJF's superior performance in capital efficiency, making it a more attractive investment option for those seeking higher returns relative to the cost of capital.
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