ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. McDermott International's annualized return on capital (ROC %) for the quarter that ended in Dec. 2025 was 4.67%.
As of today (2026-06-24), McDermott International's WACC % is 5.39%. McDermott International's ROC % is 4.67% (calculated using TTM income statement data).
McDermott International earns returns that do not match up to its cost of capital. It will destroy value as it grows.
McDermott International (OTCPK:MCDBF) 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, McDermott International's WACC % is 5.39%. McDermott International's ROC % is 4.67% (calculated using TTM income statement data).
McDermott International 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.
* 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 one times the 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.
McDermott International (MCDBF) has a ROC % of 4.67% as of Dec. 2025. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on McDermott International and its competitors.
Is McDermott International's ROC % too high?
McDermott International's current ROC % is 4.67%. The Construction industry median ROC % is 4.65. McDermott International's value of 4.67% is 0.4% above this industry median. Overall, McDermott International has a GF Score™ of 30/100, reflecting its overall financial health beyond just this single metric.
How does McDermott International's ROC % compare to CDNL and ORN?
McDermott International's ROC % of 4.67% can be compared against companies in the Construction industry. The industry median ROC % is 4.65. McDermott International's value of 4.67% is 0.4% 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 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. McDermott International's current ROC % of 4.67% is 0.4% 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 McDermott International 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. McDermott International's current ROC % is 4.67%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is McDermott International stock overvalued right now?
McDermott International (MCDBF) has a current ROC % of 4.67%. The current ROC % is 4.67% and 0.4% above the Construction industry median of 4.65. McDermott International's overall GF Score™ is 30/100 with 1 warning sign 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 McDermott International (MCDBF), the current ROC % is 4.67% 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.
McDermott International Ltd is a fully integrated provider of engineering, procurement, construction, and installation (EPCI) solutions to the energy industry globally. The company designs and builds infrastructure to transport and process oil and gas, covering offshore, subsea, liquefied natural gas (LNG), and downstream oil and gas projects, including fixed, floating, and subsea production facilities, pipelines, storage systems, and processing plants. It also provides energy transition and sustainable engineering solutions. The company operates through the Low Carbon Solutions, Offshore Middle East, and Subsea and Floating Facilities segments, serving national and other oil and gas companies across energy-producing regions, and generates the majority of its revenue from United States.
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