Hagerty, Inc. (NYSE:HGTY) demonstrates exceptional financial performance with a Return on Invested Capital (ROIC) of 20.435% significantly surpassing its Weighted Average Cost of Capital (WACC) of 7.248%.
The company’s ROIC to WACC ratio of 2.819 outperforms its peers, indicating superior efficiency in deploying capital to generate returns.
Comparative analysis with peers such as Ermenegildo Zegna N.V. (NYSE:ZGN), CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS), and others highlights Hagerty’s leading position in capital utilization efficiency within the insurance sector.
Hagerty, Inc. (NYSE:HGTY) operates in the insurance sector, specifically focusing on classic and enthusiast vehicles. This niche market sets it apart from its competitors, offering specialized insurance products that cater to a unique customer base. The company’s ability to generate a high Return on Invested Capital (ROIC) of 20.435% compared to its Weighted Average Cost of Capital (WACC) of 7.248% demonstrates its proficiency in utilizing invested funds to generate profits. This is a critical measure of a company’s financial performance, indicating that Hagerty is not only managing its investments wisely but also creating substantial value for its shareholders.
When comparing Hagerty to its peers, it’s evident that the company outperforms others in its sector in terms of ROIC to WACC ratio. This ratio is a key indicator of how well a company is generating returns on its investments compared to the costs of its capital. Hagerty’s ratio of 2.819 is significantly higher than any of its closest peers, with Ermenegildo Zegna N.V. (NYSE:ZGN) having the next highest ratio at 1.933. This gap underscores Hagerty’s superior efficiency in deploying its capital to generate returns.
The analysis of Hagerty’s peers reveals a wide range of efficiency in capital utilization. For instance, CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) and Clearwater Analytics Holdings, Inc. (NYSE:CWAN) show much lower ROIC to WACC ratios of 0.291 and 0.078, respectively. These figures suggest that these companies are not generating returns on their investments as effectively as Hagerty. On the other hand, companies like Bowlero Corp. (NYSE:BOWL) and Blue Owl Capital Inc. (NYSE:OWL) have ratios of 1.391 and 1.399, respectively, indicating moderate efficiency but still falling short of Hagerty’s performance.
The data highlights Hagerty’s exceptional ability to generate value over its cost of capital, positioning it as a potentially attractive investment opportunity within its sector. The company’s strong performance, as indicated by its high ROIC to WACC ratio, suggests that Hagerty is effectively using its capital to generate returns, outpacing its peers in this critical financial metric. This analysis not only showcases Hagerty’s financial health but also its potential for continued growth and value creation for its investors.
