Wingstop Inc. (NASDAQ:WING) is a prominent player in the fast-casual restaurant sector, specializing in chicken wings. It competes within the vast restaurant and food service industry against giants like Shake Shack, Papa John’s, Jack in the Box, Planet Fitness, and Domino’s Pizza, primarily through its franchised locations that offer a diverse range of flavors and sides.

In assessing Wingstop’s financial health, two critical metrics stand out: its Return on Invested Capital (ROIC) is 19.45%, and its Weighted Average Cost of Capital (WACC) is 12.62%. These figures yield a ROIC/WACC ratio of 1.54, showcasing Wingstop’s ability to generate returns well above its capital costs, indicating efficient capital use.

When compared to its competitors, Wingstop’s financial performance is robust. Shake Shack, for instance, has a ROIC of just 0.52% and a WACC of 11.53%, leading to a dismal ROIC/WACC ratio of 0.045, signaling its struggles to cover capital costs. Conversely, Papa John’s excels with a ROIC of 22.50% and a WACC of 7.36%, achieving a ROIC/WACC ratio of 3.06, significantly surpassing Wingstop’s ratio.

Jack in the Box emerges as a standout with an astonishing ROIC of 87.85% and a WACC of 5.09%, culminating in a ROIC/WACC ratio of 17.25. This indicates exceptional capital efficiency. Similarly, Domino’s Pizza demonstrates strong performance with a ROIC of 54.14% and a WACC of 7.15%, leading to a ROIC/WACC ratio of 7.58.

Although not a direct competitor in the food sector, Planet Fitness presents a ROIC of 8.72% and a WACC of 11.65%, resulting in a ROIC/WACC ratio of 0.75. This suggests that, unlike Wingstop and some of its peers, Planet Fitness does not generate returns above its capital costs.