ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. WH Smith's annualized return on capital (ROC %) for the quarter that ended in Feb. 2026 was 2.43%.
As of today (2026-06-25), WH Smith's WACC % is 8.07%. WH Smith's ROC % is 7.69% (calculated using TTM income statement data).
WH Smith earns returns that do not match up to its cost of capital. It will destroy value as it grows.
WH Smith (LSE:SMWH) 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, WH Smith's WACC % is 8.07%. WH Smith's ROC % is 7.69% (calculated using TTM income statement data).
WH Smith 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.
WH Smith ROC % Related Terms
WH Smith ROC % Historical Data
* Premium members only.
The historical data trend for WH Smith'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 (Feb. 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.
WH Smith (LSE:SMWH) has a ROC % of 2.43% as of Feb. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on WH Smith and its competitors.
Is WH Smith's ROC % too high?
WH Smith's current ROC % is 2.43%. The Retail - Cyclical industry median ROC % is 4.37. WH Smith's value of 2.43% is 44.4% below this industry median. Overall, WH Smith has a GF Score™ of 55/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does WH Smith's ROC % compare to CASY and WSM?
WH Smith's ROC % of 2.43% can be compared against companies in the Retail - Cyclical industry. The industry median ROC % is 4.37. WH Smith's value of 2.43% is 44.4% 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 Retail - Cyclical company?
The median ROC % among Retail - Cyclical companies is 4.37, based on 1,113 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. WH Smith's current ROC % of 2.43% is 44.4% 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 WH Smith and its competitors. For the Retail - Cyclical industry, the median ROC % is 4.37 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. WH Smith's current ROC % is 2.43%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is WH Smith stock overvalued right now?
Based on GuruFocus' analysis, WH Smith (LSE:SMWH) is currently considered Possible Value Trap. The stock's GF Value™ is £11.97, compared to a current price of £3.97 — trading 66.9% below its estimated fair value. The current ROC % is 2.43% and 44.4% below the Retail - Cyclical industry median of 4.37. WH Smith's overall GF Score™ is 55/100 with 5 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 WH Smith (LSE:SMWH), the current ROC % is 2.43% as of Feb. 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 WH Smith (LSE:SMWH) Overvalued in 2026?
Based on GuruFocus' analysis, WH Smith stock appears to be undervalued.
The current stock price of £3.97 is trading 66.9% below its estimated GF Value™ of £11.97.
GuruFocus considers WH Smith to be Possible Value Trap.
Key valuation signals for LSE:SMWH:
ROC %: 2.43%
GF Value™: £11.97 vs. price of £3.97 (66.9% below fair value)
Industry Position: 44.4% below the Retail - Cyclical median
No single metric tells the full story. See the LSE:SMWH stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
WH Smith PLC is a travel retailer providing travel essentials through stores in high-footfall transport hubs, operating as a pure-play travel retail business following the sale of its High Street operations. The Company offers a broad portfolio of products and services, including books and magazines, food-to-go, beverages, health and beauty items, travel and technology accessories, and selected partner services. Its operations are organised into three segments: the UK, which generates the majority of revenue and operates stores across airports, hospitals, railway stations, and service areas; North America, with stores mainly in airports and a Resorts business in Las Vegas; and the Rest of the World.
55GF Score
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