ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Downer EDI's annualized return on capital (ROC %) for the quarter that ended in Dec. 2025 was 3.54%.
As of today (2026-06-24), Downer EDI's WACC % is 10.42%. Downer EDI's ROC % is 5.04% (calculated using TTM income statement data).
Downer EDI earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Downer EDI (FRA:DNE) ROC % Explanation
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, Downer EDI's WACC % is 10.42%. Downer EDI's ROC % is 5.04% (calculated using TTM income statement data).
Downer EDI 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 %, 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.
Downer EDI ROC % Related Terms
Downer EDI ROC % Historical Data
* Premium members only.
The historical data trend for Downer EDI's ROC % 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.
Note:
The Operating Income data used here is two times the semi-annual (Dec. 2025) 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.
Downer EDI (FRA:DNE) has a ROC % of 3.54% as of Dec. 2025. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Downer EDI and its competitors.
Is Downer EDI's ROC % too high?
Downer EDI's current ROC % is 3.54%. The Construction industry median ROC % is 4.65. Downer EDI's value of 3.54% is 23.9% below this industry median. Overall, Downer EDI has a GF Score™ of 65/100, reflecting its overall financial health beyond just this single metric.
How does Downer EDI's ROC % compare to PWR and FIX?
Downer EDI's ROC % of 3.54% can be compared against companies in the Construction industry. The industry median ROC % is 4.65. Downer EDI's value of 3.54% is 23.9% 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 Construction company?
The median ROC % among Construction companies is 4.65, based on 1,755 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. Downer EDI's current ROC % of 3.54% is 23.9% 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 Downer EDI and its competitors. For the Construction industry, the median ROC % is 4.65 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Downer EDI's current ROC % is 3.54%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Downer EDI stock overvalued right now?
Downer EDI (FRA:DNE) has a current ROC % of 3.54%. The stock's GF Value™ is €2.72, compared to a current price of €4.82 — trading 77.2% above its estimated fair value. The current ROC % is 3.54% and 23.9% below the Construction industry median of 4.65. Downer EDI's overall GF Score™ is 65/100 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 Downer EDI (FRA:DNE), the current ROC % is 3.54% as of Dec. 2025. 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 Downer EDI (FRA:DNE) Overvalued in 2026?
Based on GuruFocus' analysis, Downer EDI stock appears to be overvalued.
The current stock price of €4.82 is trading 77.2% above its estimated GF Value™ of €2.72.
Key valuation signals for FRA:DNE:
ROC %: 3.54%
GF Value™: €2.72 vs. price of €4.82 (77.2% above fair value)
Industry Position: 23.9% below the Construction median
No single metric tells the full story. See the FRA:DNE stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Downer conducts construction and maintenance in the transport, technology and communications, utilities, rail, and defense segments. The future of Downer is focused on urban services, with mining and higher-risk construction businesses exited. Downer has strong relationships with local and state governments that outsource operational and management activities, ensuring a relatively consistent stream of recurring contract work. The transport segment contributes the majority of earnings.
65GF Score
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ROC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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