Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are critical in evaluating SITE Centers’ financial efficiency.
SITE Centers has a ROIC of 3.22% and a WACC of 7.38%, indicating inefficiencies in value creation with a ROIC to WACC ratio of 0.44.
Among its peers, Brixmor Property Group exhibits the highest efficiency with a ROIC to WACC ratio of 0.53, suggesting a stronger ability to create value over its cost of capital.
SITE Centers Corp. (NYSE:SITC) is a real estate investment trust (REIT) that focuses on owning and managing open-air shopping centers. The company operates primarily in the United States, providing retail spaces for various tenants. In the competitive landscape of retail REITs, SITE Centers competes with companies like Urban Edge Properties, Brixmor Property Group, American Assets Trust, and Kite Realty Group Trust.
In evaluating SITE Centers’ financial efficiency, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial metrics. SITE Centers has a ROIC of 3.22% and a WACC of 7.38%, resulting in a ROIC to WACC ratio of 0.44. This ratio indicates that the company is not generating returns that exceed its cost of capital, suggesting inefficiencies in value creation.
Comparatively, Urban Edge Properties also has a ROIC to WACC ratio of 0.44, with a ROIC of 3.73% and a WACC of 8.44%. This similarity in ratio suggests that both companies face challenges in generating returns above their capital costs. However, Brixmor Property Group shows a more favorable position with a ROIC to WACC ratio of 0.53, indicating better efficiency in generating returns over its cost of capital.
American Assets Trust and Kite Realty Group Trust have lower ROIC to WACC ratios of 0.39 and 0.31, respectively. American Assets Trust has a ROIC of 2.72% and a WACC of 6.97%, while Kite Realty Group Trust has a ROIC of 2.57% and a WACC of 8.33%. These figures suggest that these companies are less efficient in generating returns compared to SITE Centers and its other peers.
Overall, Brixmor Property Group stands out among the peers with the highest ROIC to WACC ratio, indicating a stronger ability to create value over its cost of capital. This comparison highlights the importance of ROIC and WACC in assessing the financial health and efficiency of companies within the retail REIT sector.
