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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Distribution Solutions Group's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 1.82%.
As of today (2026-07-24), Distribution Solutions Group's WACC % is 5.23%. Distribution Solutions Group's ROC % is 1.75% (calculated using TTM income statement data).
Distribution Solutions Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Distribution Solutions Group (FRA:LW2) 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, Distribution Solutions Group's WACC % is 5.23%. Distribution Solutions Group's ROC % is 1.75% (calculated using TTM income statement data).
Distribution Solutions Group 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.
Distribution Solutions Group ROC % Related Terms
Distribution Solutions Group ROC % Historical 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.
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.
Distribution Solutions Group (FRA:LW2) has a ROC % of 1.82% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Distribution Solutions Group and its competitors.
Is Distribution Solutions Group's ROC % too high?
Distribution Solutions Group's current ROC % is 1.82%. The Industrial Distribution industry median ROC % is 6.21. Distribution Solutions Group's value of 1.82% is 70.7% below this industry median. Overall, Distribution Solutions Group has a GF Score™ of 76/100, reflecting its overall financial health beyond just this single metric.
How does Distribution Solutions Group's ROC % compare to GIC and BXC?
Distribution Solutions Group's ROC % of 1.82% can be compared against companies in the Industrial Distribution industry. The industry median ROC % is 6.21. Distribution Solutions Group's value of 1.82% is 70.7% 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 an Industrial Distribution company?
The median ROC % among Industrial Distribution companies is 6.21, based on 157 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. Distribution Solutions Group's current ROC % of 1.82% is 70.7% 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 Distribution Solutions Group and its competitors. For the Industrial Distribution industry, the median ROC % is 6.21 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Distribution Solutions Group's current ROC % is 1.82%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Distribution Solutions Group stock overvalued right now?
Distribution Solutions Group (FRA:LW2) has a current ROC % of 1.82%. The stock's GF Value™ is €28.05, compared to a current price of €29.40 — trading 4.8% above its estimated fair value. The current ROC % is 1.82% and 70.7% below the Industrial Distribution industry median of 6.21. Distribution Solutions Group's overall GF Score™ is 76/100 with 11 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 Distribution Solutions Group (FRA:LW2), the current ROC % is 1.82% 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 Distribution Solutions Group (FRA:LW2) Overvalued in 2026?
Based on GuruFocus' analysis, Distribution Solutions Group stock appears to be overvalued.
The current stock price of €29.40 is trading 4.8% above its estimated GF Value™ of €28.05.
Key valuation signals for FRA:LW2:
ROC %: 1.82%
GF Value™: €28.05 vs. price of €29.40 (4.8% above fair value)
Industry Position: 70.7% below the Industrial Distribution median
No single metric tells the full story. See the FRA:LW2 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Distribution Solutions Group Inc is a specialty distribution company providing value-added distribution solutions to the maintenance, repair and operations (MRO), original equipment manufacturer (OEM) and industrial technology markets. The company operates through four reportable segments: Lawson, TestEquity, Gexpro Services and Canada Branch Division. Lawson distributes specialty products and services to the industrial, commercial, institutional and government MRO marketplace. TestEquity, which generates maximum revenue, distributes test and measurement equipment and solutions, industrial and electronic production supplies and vendor managed inventory programs. Gexpro Services is a supply chain solutions provider. The company generates majority of its revenue from United States.
76GF Score
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