ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Derwent London's annualized return on capital (ROC %) for the quarter that ended in Dec. 2025 was 2.96%.
As of today (2026-06-29), Derwent London's WACC % is 8.27%. Derwent London's ROC % is 3.00% (calculated using TTM income statement data).
Derwent London earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Derwent London (FRA:DVK) 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, Derwent London's WACC % is 8.27%. Derwent London's ROC % is 3.00% (calculated using TTM income statement data).
Derwent London 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.
Derwent London ROC % Related Terms
Derwent London ROC % Historical Data
* Premium members only.
The historical data trend for Derwent London'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.
Derwent London (FRA:DVK) has a ROC % of 2.96% as of Dec. 2025. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Derwent London and its competitors.
Is Derwent London's ROC % too high?
Derwent London's current ROC % is 2.96%. The REITs industry median ROC % is 3.74. Derwent London's value of 2.96% is 20.9% below this industry median. Overall, Derwent London has a GF Score™ of 70/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Derwent London's ROC % compare to BXP and ARE?
Derwent London's ROC % of 2.96% can be compared against companies in the REITs industry. The industry median ROC % is 3.74. Derwent London's value of 2.96% is 20.9% 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 REITs company?
The median ROC % among REITs companies is 3.74, based on 749 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. Derwent London's current ROC % of 2.96% is 20.9% 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 Derwent London and its competitors. For the REITs industry, the median ROC % is 3.74 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Derwent London's current ROC % is 2.96%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Derwent London stock overvalued right now?
Based on GuruFocus' analysis, Derwent London (FRA:DVK) is currently considered Modestly Undervalued. The stock's GF Value™ is €26.78, compared to a current price of €21.80 — trading 18.6% below its estimated fair value. The current ROC % is 2.96% and 20.9% below the REITs industry median of 3.74. Derwent London's overall GF Score™ is 70/100 with 10 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 Derwent London (FRA:DVK), the current ROC % is 2.96% 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 Derwent London (FRA:DVK) Overvalued in 2026?
Based on GuruFocus' analysis, Derwent London stock appears to be undervalued.
The current stock price of €21.80 is trading 18.6% below its estimated GF Value™ of €26.78.
GuruFocus considers Derwent London to be Modestly Undervalued.
Key valuation signals for FRA:DVK:
ROC %: 2.96%
GF Value™: €26.78 vs. price of €21.80 (18.6% below fair value)
No single metric tells the full story. See the FRA:DVK stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Derwent London PLC is London's inventive office specialist property regenerators and investors and is well known for its design-led philosophy and creative management approach to development. Its appealing designs attract a range of tenants, including those from creative industries. The group has been a Real Estate Investment Trust (REIT) principally property investors with tax-exempt property rental businesses, but remain subject to corporation tax on nonexempt income and gains The Group owns and manages an investment portfolio of approximately 5.4 million sq ft, of which 98% is located in central London, with a specific focus on the West End and the areas bordering the City of London.
70GF Score
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