Bread Financial Holdings, Inc. (BFH) has a ROIC of 0.1441% and a WACC of 12.76%, indicating challenges in generating profitable returns.
Federated Hermes, Inc. (FHI) showcases strong financial performance with a ROIC of 20.35% and a WACC of 8.94%, suggesting efficient capital utilization.
John Wiley & Sons, Inc. (WLY) and Atlantic Union Bankshares Corporation (AUB) struggle with negative or low ROIC to WACC ratios, indicating difficulties in covering their cost of capital.
Bread Financial Holdings, Inc. (NYSE:BFH) is a financial services company that provides a range of credit and payment solutions. The company operates in a competitive landscape with peers like John Wiley & Sons, Inc., Federated Hermes, Inc., Ball Corporation, Piper Sandler Companies, and Atlantic Union Bankshares Corporation. These companies vary in their financial performance, particularly in terms of Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC).
BFH’s ROIC is 0.1441%, which is significantly lower than its WACC of 12.76%. This results in a ROIC to WACC ratio of 0.0113, indicating that BFH is not generating returns that exceed its cost of capital. This suggests that the company may face challenges in efficiently utilizing its capital to generate profits.
In comparison, Federated Hermes, Inc. (FHI) demonstrates a strong financial performance with a ROIC of 20.35% and a WACC of 8.94%. This results in a ROIC to WACC ratio of 2.2750, highlighting FHI’s ability to generate returns well above its cost of capital. This efficient capital utilization suggests potential for growth and a competitive edge in the market.
On the other hand, John Wiley & Sons, Inc. (WLY) and Atlantic Union Bankshares Corporation (AUB) show negative or low ROIC to WACC ratios. WLY has a ROIC of -44.47% against a WACC of 7.42%, resulting in a ratio of -5.9963. Similarly, AUB’s ROIC is -0.14% with a WACC of 13.46%, leading to a ratio of -0.0107. These figures indicate that both companies are struggling to generate returns that cover their cost of capital.
Ball Corporation (BALL) and Piper Sandler Companies (PIPR) present more balanced figures. BALL has a ROIC of 7.74% and a WACC of 7.37%, resulting in a ROIC to WACC ratio of 1.0501. PIPR shows a ROIC of 16.84% and a WACC of 10.89%, with a ratio of 1.5468. These companies are generating returns that slightly exceed their cost of capital, indicating a more stable financial position compared to BFH.
