ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Otis Worldwide's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 18.93%.
As of today (2026-06-25), Otis Worldwide's WACC % is 8.31%. Otis Worldwide's ROC % is 22.29% (calculated using TTM income statement data).
Otis Worldwide generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
Otis Worldwide (NYSE:OTIS) 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, Otis Worldwide's WACC % is 8.31%. Otis Worldwide's ROC % is 22.29% (calculated using TTM income statement data).
Otis Worldwide generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
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.
Otis Worldwide ROC % Related Terms
Otis Worldwide ROC % Historical Data
* Premium members only.
The historical data trend for Otis Worldwide'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 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.
Otis Worldwide (OTIS) has a ROC % of 18.93% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Otis Worldwide and its competitors.
Is Otis Worldwide's ROC % too high?
Otis Worldwide's current ROC % is 18.93%. The Industrial Products industry median ROC % is 5.23. Otis Worldwide's value of 18.93% is 262.3% above this industry median. Overall, Otis Worldwide has a GF Score™ of 76/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Otis Worldwide's ROC % compare to IR and XYL?
Otis Worldwide's ROC % of 18.93% can be compared against companies in the Industrial Products industry. The industry median ROC % is 5.23. Otis Worldwide's value of 18.93% is 262.3% 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 an Industrial Products company?
The median ROC % among Industrial Products companies is 5.23, based on 3,040 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. Otis Worldwide's current ROC % of 18.93% is 262.3% 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 Otis Worldwide and its competitors. For the Industrial Products industry, the median ROC % is 5.23 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Otis Worldwide's current ROC % is 18.93%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Otis Worldwide stock overvalued right now?
Based on GuruFocus' analysis, Otis Worldwide (OTIS) is currently considered Modestly Undervalued. The stock's GF Value™ is $101.23, compared to a current price of $72.63 — trading 28.3% below its estimated fair value. The current ROC % is 18.93% and 262.3% above the Industrial Products industry median of 5.23. Otis Worldwide's overall GF Score™ is 76/100 with 3 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 Otis Worldwide (OTIS), the current ROC % is 18.93% 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 Otis Worldwide (OTIS) Overvalued in 2026?
Based on GuruFocus' analysis, Otis Worldwide stock appears to be undervalued.
The current stock price of $72.63 is trading 28.3% below its estimated GF Value™ of $101.23.
GuruFocus considers Otis Worldwide to be Modestly Undervalued.
Key valuation signals for OTIS:
ROC %: 18.93%
GF Value™: $101.23 vs. price of $72.63 (28.3% below fair value)
Industry Position: 262.3% above the Industrial Products median
No single metric tells the full story. See the OTIS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Otis is the largest global elevator and escalator supplier by revenue with around 18% global market share. In 1854 Otis' founder and namesake Elisha Graves Otis, invented a safety mechanism that prevented elevators from falling if the hoisting cable failed. The company's product and service lifecycle begins with installations of elevator units in new buildings, later selling maintenance services on the units, and eventually replacement of the units after the average 15- to 20-year useful life of an elevator. As the largest global OEM, Otis has amassed an installed base under service that exceeds 2 million elevators. Its business model is similar to that of its closest competitors Kone, Schindler, and TK Elevator.
76GF Score
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