GURUFOCUS.COM » STOCK LIST » USA » NYSE » Weyerhaeuser Co (NYSE:WY) » Definitions » ROIC %
Switch to:

Weyerhaeuser Co ROIC %

: 22.47% (As of Jun. 2022)
View and export this data going back to 1963. Start your Free Trial

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Weyerhaeuser Co's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was 22.47%.

As of today (2022-08-08), Weyerhaeuser Co's WACC % is 11.40%. Weyerhaeuser Co's ROIC % is 19.22% (calculated using TTM income statement data). Weyerhaeuser Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Weyerhaeuser Co ROIC % Historical Data

The historical data trend for Weyerhaeuser Co's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Weyerhaeuser Co Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.89 7.75 1.62 8.51 18.66

Weyerhaeuser Co Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 28.60 13.94 12.31 28.09 22.47

Competitive Comparison

For the REIT - Specialty subindustry, Weyerhaeuser Co's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Weyerhaeuser Co ROIC % Distribution

For the REITs industry and Real Estate sector, Weyerhaeuser Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Weyerhaeuser Co's ROIC % falls into.



Weyerhaeuser Co ROIC % Calculation

Weyerhaeuser Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:

ROIC % (A: Dec. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2020 ) + Invested Capital (A: Dec. 2021 ))/ count )
=3597 * ( 1 - 21.38% )/( (15246 + 15068)/ 2 )
=2827.9614/15157
=18.66 %

where

Weyerhaeuser Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2022 is calculated as:

ROIC % (Q: Jun. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2022 ) + Invested Capital (Q: Jun. 2022 ))/ count )
=4192 * ( 1 - 18.93% )/( (15116 + 15135)/ 2 )
=3398.4544/15125.5
=22.47 %

where

Note: The Operating Income data used here is four times the quarterly (Jun. 2022) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Weyerhaeuser Co  (NYSE:WY) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Weyerhaeuser Co's WACC % is 11.40%. Weyerhaeuser Co's ROIC % is 19.22% (calculated using TTM income statement data). Weyerhaeuser Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. Weyerhaeuser Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


Weyerhaeuser Co ROIC % Related Terms

Thank you for viewing the detailed overview of Weyerhaeuser Co's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


Weyerhaeuser Co Business Description

Weyerhaeuser Co logo
Address
220 Occidental Avenue South, Seattle, WA, USA, 98104-7800
Weyerhaeuser ranks among the world's largest forest product companies. Following the 2016 sale of its pulp business to International Paper, Weyerhaeuser operates three business segments: timberlands, wood products, and real estate. Weyerhaeuser is structured as a real estate investment trust and is not required to pay federal income taxes on earnings generated by timber harvest activities. Earnings from its wood products segment are subject to federal income tax. Weyerhaeuser acquired fellow timber REIT Plum Creek in 2016.
Executives
Keatley Travis A officer: Senior Vice President 220 OCCIDENTAL AVE SOUTH SEATTLE WA 98104
Loewe Nancy S. officer: Senior Vice President and CFO 351 PHELPS DRIVE IRVING TX 75038
Merriwether Deidra C director 100 GRAINGER PARKWAY LAKE FOREST IL 60045
Selzer Lawrence A director C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104
Racicot Marc F director 1411 E. MISSION AVENUE SPOKANE WA 99202
Monaco Albert director #3000, 425 - 1ST STREET SW CALGARY A0 T2P 3L8
Stockfish Devin W director, officer: President and CEO C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104
O'rear Keith officer: Senior Vice President C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104
Harlan Kristy T. officer: Senior Vice President C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104
Merle Denise M officer: Senior Vice President C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104
Blocker Adrian M officer: Senior Vice President C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104
Wold David M officer: VP & Chief Accounting Officer C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104
Kilberg James A officer: Senior Vice President C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104
Hagen Russell S officer: Senior Vice President and CFO C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104
Holley Rick R director C/O WEYERHAEUSER COMPANY 220 OCCIDENTAL AVENUE SOUTH SEATTLE WA 98104

Weyerhaeuser Co Headlines

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)