ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. RLJ Lodging Trust's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 2.60%.
As of today (2026-06-25), RLJ Lodging Trust's WACC % is 7.16%. RLJ Lodging Trust's ROC % is 2.85% (calculated using TTM income statement data).
RLJ Lodging Trust earns returns that do not match up to its cost of capital. It will destroy value as it grows.
RLJ Lodging Trust (NYSE:RLJ) 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, RLJ Lodging Trust's WACC % is 7.16%. RLJ Lodging Trust's ROC % is 2.85% (calculated using TTM income statement data).
RLJ Lodging Trust 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.
RLJ Lodging Trust ROC % Related Terms
RLJ Lodging Trust ROC % Historical Data
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The historical data trend for RLJ Lodging Trust'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.
RLJ Lodging Trust (RLJ) has a ROC % of 2.60% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on RLJ Lodging Trust and its competitors.
Is RLJ Lodging Trust's ROC % too high?
RLJ Lodging Trust's current ROC % is 2.60%. The REITs industry median ROC % is 3.74. RLJ Lodging Trust's value of 2.60% is 30.5% below this industry median. Overall, RLJ Lodging Trust has a GF Score™ of 76/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does RLJ Lodging Trust's ROC % compare to XHR and PEB?
RLJ Lodging Trust's ROC % of 2.60% can be compared against companies in the REITs industry. The industry median ROC % is 3.74. RLJ Lodging Trust's value of 2.60% is 30.5% 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 REITs company?
The median ROC % among REITs companies is 3.74, based on 750 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. RLJ Lodging Trust's current ROC % of 2.60% is 30.5% 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 RLJ Lodging Trust and its competitors. For the REITs industry, the median ROC % is 3.74 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. RLJ Lodging Trust's current ROC % is 2.60%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is RLJ Lodging Trust stock overvalued right now?
Based on GuruFocus' analysis, RLJ Lodging Trust (RLJ) is currently considered Modestly Overvalued. The stock's GF Value™ is $9.94, compared to a current price of $11.39 — trading 14.5% above its estimated fair value. The current ROC % is 2.60% and 30.5% below the REITs industry median of 3.74. RLJ Lodging Trust's overall GF Score™ is 76/100 with 8 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 RLJ Lodging Trust (RLJ), the current ROC % is 2.60% 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 RLJ Lodging Trust (RLJ) Overvalued in 2026?
Based on GuruFocus' analysis, RLJ Lodging Trust stock appears to be overvalued.
The current stock price of $11.39 is trading 14.5% above its estimated GF Value™ of $9.94.
GuruFocus considers RLJ Lodging Trust to be Modestly Overvalued.
Key valuation signals for RLJ:
ROC %: 2.60%
GF Value™: $9.94 vs. price of $11.39 (14.5% above fair value)
No single metric tells the full story. See the RLJ stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
RLJ Lodging Trust is a real estate investment trust focused on premium-branded, rooms-oriented, high-margin, focused-service, and compact full-service hotels located within the heart of demand locations. Its hotels are geographically diverse and concentrated in urban markets providing multiple demand generators from business, leisure, and other travelers. Its hotels are under the Marriott, Hilton, and Hyatt brand names. The Hotel is a single reportable segment. Its hotel segment revenues are derived from the operation of hotel properties which includes room revenue by renting hotel rooms, food and beverage revenue from the sale of food and beverages, and other revenue from parking fees, resort fees, gift shop sales, and other guest service fees.
76GF Score
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