Pure Cycle Corporation (NASDAQ:PCYO) is a company involved in providing water and wastewater services. It operates primarily in the Denver, Colorado area, focusing on sustainable water solutions. The company competes with other water resource management firms, such as Cadiz Inc. and Global Water Resources, Inc., in delivering efficient water services.

Pure Cycle’s Return on Invested Capital (ROIC) is 6.42%, which is lower than its Weighted Average Cost of Capital (WACC) of 9.05%. This results in a ROIC/WACC ratio of 0.71, indicating that the company is not generating returns that exceed its cost of capital. Despite this, Pure Cycle has the highest ROIC/WACC ratio among its peers.

Cadiz Inc. (CDZI) has a negative ROIC of -21.18% and a WACC of 8.70%, leading to a ROIC/WACC ratio of -2.43. This suggests that Cadiz is significantly underperforming in terms of capital efficiency. Similarly, Global Water Resources, Inc. (GWRS) has a ROIC of 1.84% and a WACC of 7.31%, resulting in a ROIC/WACC ratio of 0.25, which is also below optimal levels.

Artesian Resources Corporation (ARTNA) and Parke Bancorp, Inc. (PKBK) have ROIC/WACC ratios of 0.66 and 0.17, respectively. Artesian’s ROIC of 3.16% is closer to its WACC of 4.79%, while Parke Bancorp’s ROIC of 2.26% is far below its WACC of 13.42%. Peoples Bancorp of North Carolina, Inc. (PEBK) has a ROIC of 1.97% and a WACC of 13.72%, resulting in a ROIC/WACC ratio of 0.14.

Despite Pure Cycle having the highest ROIC/WACC ratio among its peers, all companies in this analysis have ROICs below their respective WACCs. This indicates that none are currently generating returns that exceed their cost of capital, which could be a concern for investors seeking strong capital efficiency.