ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. PennyMac Financial Services's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 1.18%.
As of today (2026-06-25), PennyMac Financial Services's WACC % is 1.93%. PennyMac Financial Services's ROC % is 2.06% (calculated using TTM income statement data).
PennyMac Financial Services 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.
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. 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 ROC % 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, PennyMac Financial Services's WACC % is 1.93%. PennyMac Financial Services's ROC % is 2.06% (calculated using TTM income statement data).
PennyMac Financial Services 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.
Be Aware
Like ROE % and ROA %, ROC % 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.
* 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.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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.
PennyMac Financial Services (FRA:1AC) has a ROC % of 1.18% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on PennyMac Financial Services and its competitors.
Is PennyMac Financial Services' ROC % too high?
PennyMac Financial Services' current ROC % is 1.18%. The Banks industry median ROC % is 1.98. PennyMac Financial Services' value of 1.18% is 40.3% below this industry median. Overall, PennyMac Financial Services has a GF Score™ of 71/100, reflecting its overall financial health beyond just this single metric.
How does PennyMac Financial Services' ROC % compare to FMCC and WD?
PennyMac Financial Services' ROC % of 1.18% can be compared against companies in the Banks industry. The industry median ROC % is 1.98. PennyMac Financial Services' value of 1.18% is 40.3% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Banks company?
The median ROC % among Banks companies is 1.98, based on 48 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. PennyMac Financial Services's current ROC % of 1.18% is 40.3% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on PennyMac Financial Services and its competitors. For the Banks industry, the median ROC % is 1.98 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. PennyMac Financial Services's current ROC % is 1.18%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is PennyMac Financial Services stock overvalued right now?
PennyMac Financial Services (FRA:1AC) has a current ROC % of 1.18%. The stock's GF Value™ is €114.69, compared to a current price of €69.50 — trading 39.4% below its estimated fair value. The current ROC % is 1.18% and 40.3% below the Banks industry median of 1.98. PennyMac Financial Services' overall GF Score™ is 71/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For PennyMac Financial Services (FRA:1AC), the current ROC % is 1.18% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is PennyMac Financial Services (FRA:1AC) Overvalued in 2026?
Based on GuruFocus' analysis, PennyMac Financial Services stock appears to be undervalued.
The current stock price of €69.50 is trading 39.4% below its estimated GF Value™ of €114.69.
Key valuation signals for FRA:1AC:
ROC %: 1.18%
GF Value™: €114.69 vs. price of €69.50 (39.4% below fair value)
No single metric tells the full story. See the FRA:1AC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
PennyMac Financial Services Inc is a specialty financial services firm with a comprehensive mortgage platform mainly focused on the production and servicing of U.S. residential mortgage loans. The firm is also engaged in managing investments related to the U.S. mortgage market and provides products and services that leverage technologies to support customers. The company operates through two reportable operating segments: production and servicing. The production segment performs loan origination, acquisition, and sale activities, while the servicing segment performs servicing and subservicing of loans, early buyout transactions, and servicing of loans sourced and managed for PMT. The majority of revenue comes from the production segment.
71GF Score
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