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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Smith Douglas Homes's annualized return on capital (ROC %) for the quarter that ended in Jun. 2026 was 4.34%.
As of today (2026-08-18), Smith Douglas Homes's WACC % is 9.93%. Smith Douglas Homes's ROC % is 8.43% (calculated using TTM income statement data).
Smith Douglas Homes earns returns that do not match up to its cost of capital. It will destroy value as it grows.
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, Smith Douglas Homes's WACC % is 9.93%. Smith Douglas Homes's ROC % is 8.43% (calculated using TTM income statement data).
Smith Douglas Homes 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.
Smith Douglas Homes ROC % Related Terms
Smith Douglas Homes ROC % Historical Data
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The historical data trend for Smith Douglas Homes'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 (Jun. 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.
Smith Douglas Homes (SDHC) has a ROC % of 4.34% as of Jun. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Smith Douglas Homes and its competitors.
Is Smith Douglas Homes' ROC % too high?
Smith Douglas Homes' current ROC % is 4.34%. The Real Estate industry median ROC % is 2.13. Smith Douglas Homes' value of 4.34% is 103.8% above this industry median. Overall, Smith Douglas Homes has a GF Score™ of 33/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Smith Douglas Homes' ROC % compare to AXR and LPA?
Smith Douglas Homes' ROC % of 4.34% can be compared against companies in the Real Estate industry. The industry median ROC % is 2.13. Smith Douglas Homes' value of 4.34% is 103.8% 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 Real Estate company?
The median ROC % among Real Estate companies is 2.13, based on 1,762 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. Smith Douglas Homes's current ROC % of 4.34% is 103.8% 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 Smith Douglas Homes and its competitors. For the Real Estate industry, the median ROC % is 2.13 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Smith Douglas Homes's current ROC % is 4.34%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Smith Douglas Homes stock overvalued right now?
Based on GuruFocus' analysis, Smith Douglas Homes (SDHC) is currently considered Significantly Undervalued. The stock's GF Value™ is $29.09, compared to a current price of $13.99 — trading 51.9% below its estimated fair value. The current ROC % is 4.34% and 103.8% above the Real Estate industry median of 2.13. Smith Douglas Homes' overall GF Score™ is 33/100 with 2 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 Smith Douglas Homes (SDHC), the current ROC % is 4.34% as of Jun. 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 Smith Douglas Homes (SDHC) Overvalued in 2026?
Based on GuruFocus' analysis, Smith Douglas Homes stock appears to be undervalued.
The current stock price of $13.99 is trading 51.9% below its estimated GF Value™ of $29.09.
GuruFocus considers Smith Douglas Homes to be Significantly Undervalued.
Key valuation signals for SDHC:
ROC %: 4.34%
GF Value™: $29.09 vs. price of $13.99 (51.9% below fair value)
Industry Position: 103.8% above the Real Estate median
No single metric tells the full story. See the SDHC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Smith Douglas Homes Corpis a builder of single-family homes in communities in certain markets in the southeastern and southern United States. The Company's homes and communities are targeted to first-time and empty-nest homebuyers. The Company currently operates in metropolitan Atlanta, Birmingham, Chattanooga, Central Georgia, Charlotte, Dallas-Fort Worth, Greenville, Alabama Gulf Coast, Huntsville, Nashville, Raleigh and Houston. Its operations are currently organized into ten geographical divisions which comprise two reportable segments. Its Southeast segment consists of its Atlanta, Central Georgia, Charlotte, Greenville, and Raleigh divisions. Its Central segment consists of its Alabama, Dallas-Fort Worth, Houston, Nashville, and Alabama Gulf Coast divisions.
33GF Score
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