OPHC’s ROIC of 6.49% compared to its WACC of 12.81% indicates it is not generating returns above its cost of capital.
Patriot National Bancorp, Inc. (PNBK) and Peoples Bancorp of North Carolina, Inc. (PEBK) show significant returns above their cost of capital, with ROIC to WACC ratios of 2.06 and 2.08, respectively.
Carver Bancorp, Inc. (CARV) and OPHC both struggle to cover their cost of capital, with ROIC to WACC ratios below 1.
OptimumBank Holdings, Inc. (NASDAQ:OPHC) is a financial institution that provides banking services. It operates in a competitive landscape with peers like Old Point Financial Corporation, Patriot National Bancorp, Village Bank and Trust Financial Corp., Carver Bancorp, and Peoples Bancorp of North Carolina. These companies are also in the banking sector, offering similar financial services.
In evaluating OPHC, the focus is on its Return on Invested Capital (ROIC) compared to its Weighted Average Cost of Capital (WACC). OPHC’s ROIC is 6.49%, while its WACC is 12.81%, resulting in a ROIC to WACC ratio of 0.51. This indicates that OPHC is not generating returns that exceed its cost of capital, which may be concerning for investors.
Comparatively, Old Point Financial Corporation (OPOF) has a ROIC of 10.20% and a WACC of 10.16%, leading to a ROIC to WACC ratio of 1.00. This suggests that OPOF is effectively covering its cost of capital. Meanwhile, Patriot National Bancorp, Inc. (PNBK) shows a strong performance with a ROIC of 25.52% and a WACC of 12.39%, resulting in a ROIC to WACC ratio of 2.06, indicating significant returns above its cost of capital.
Village Bank and Trust Financial Corp. (VBFC) also performs well with a ROIC of 12.56% and a WACC of 8.70%, achieving a ROIC to WACC ratio of 1.44. Carver Bancorp, Inc. (CARV), however, has a ROIC of 8.46% and a WACC of 17.80%, resulting in a ROIC to WACC ratio of 0.48, similar to OPHC’s situation.
Peoples Bancorp of North Carolina, Inc. (PEBK) stands out with a ROIC of 26.81% and a WACC of 12.86%, achieving the highest ROIC to WACC ratio of 2.08 among the peers. This indicates that PEBK is generating returns significantly above its cost of capital, showcasing strong financial performance.
