ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. City Lodge Hotels's annualized return on capital (ROC %) for the quarter that ended in Dec. 2025 was 11.56%.
As of today (2026-06-26), City Lodge Hotels's WACC % is 9.85%. City Lodge Hotels's ROC % is 9.37% (calculated using TTM income statement data).
City Lodge Hotels earns returns that do not match up to its cost of capital. It will destroy value as it grows.
City Lodge Hotels (JSE:CLH) 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, City Lodge Hotels's WACC % is 9.85%. City Lodge Hotels's ROC % is 9.37% (calculated using TTM income statement data).
City Lodge Hotels 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.
City Lodge Hotels ROC % Related Terms
City Lodge Hotels ROC % Historical Data
* Premium members only.
The historical data trend for City Lodge Hotels'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.
City Lodge Hotels (JSE:CLH) has a ROC % of 11.56% as of Dec. 2025. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on City Lodge Hotels and its competitors.
Is City Lodge Hotels' ROC % too high?
City Lodge Hotels' current ROC % is 11.56%. The Travel & Leisure industry median ROC % is 3.76. City Lodge Hotels' value of 11.56% is 207.4% above this industry median. Overall, City Lodge Hotels has a GF Score™ of 58/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does City Lodge Hotels' ROC % compare to MAR and HLT?
City Lodge Hotels' ROC % of 11.56% can be compared against companies in the Travel & Leisure industry. The industry median ROC % is 3.76. City Lodge Hotels' value of 11.56% is 207.4% above 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 Travel & Leisure company?
The median ROC % among Travel & Leisure companies is 3.76, based on 834 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. City Lodge Hotels's current ROC % of 11.56% is 207.4% above 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 City Lodge Hotels and its competitors. For the Travel & Leisure industry, the median ROC % is 3.76 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. City Lodge Hotels's current ROC % is 11.56%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is City Lodge Hotels stock overvalued right now?
Based on GuruFocus' analysis, City Lodge Hotels (JSE:CLH) is currently considered Modestly Undervalued. The stock's GF Value™ is R5.86, compared to a current price of R4.35 — trading 25.8% below its estimated fair value. The current ROC % is 11.56% and 207.4% above the Travel & Leisure industry median of 3.76. City Lodge Hotels' overall GF Score™ is 58/100 with 4 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 City Lodge Hotels (JSE:CLH), the current ROC % is 11.56% 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 City Lodge Hotels (JSE:CLH) Overvalued in 2026?
Based on GuruFocus' analysis, City Lodge Hotels stock appears to be undervalued.
The current stock price of R4.35 is trading 25.8% below its estimated GF Value™ of R5.86.
GuruFocus considers City Lodge Hotels to be Modestly Undervalued.
Key valuation signals for JSE:CLH:
ROC %: 11.56%
GF Value™: R5.86 vs. price of R4.35 (25.8% below fair value)
Industry Position: 207.4% above the Travel & Leisure median
No single metric tells the full story. See the JSE:CLH stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
City Lodge Hotels Ltd is a provider of lodging facilities in South Africa. The company's operating segment includes City Lodge; Town Lodge; Road Lodge; Courtyard Hotel; and the rest of Africa. It generates maximum revenue from the City Lodge segment.
58GF Score
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