ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Essity AB's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 8.61%.
As of today (2026-06-24), Essity AB's WACC % is 5.46%. Essity AB's ROC % is 9.36% (calculated using TTM income statement data).
Essity AB 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.
Essity AB (STU:ESWB) 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, Essity AB's WACC % is 5.46%. Essity AB's ROC % is 9.36% (calculated using TTM income statement data).
Essity AB 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.
Essity AB ROC % Related Terms
Essity AB ROC % Historical Data
* Premium members only.
The historical data trend for Essity AB'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.
Essity AB (STU:ESWB) has a ROC % of 8.61% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Essity AB and its competitors.
Is Essity AB's ROC % too high?
Essity AB's current ROC % is 8.61%. The Consumer Packaged Goods industry median ROC % is 5.16. Essity AB's value of 8.61% is 66.9% above this industry median. Overall, Essity AB has a GF Score™ of 84/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Essity AB's ROC % compare to PG and CL?
Essity AB's ROC % of 8.61% can be compared against companies in the Consumer Packaged Goods industry. The industry median ROC % is 5.16. Essity AB's value of 8.61% is 66.9% 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 Consumer Packaged Goods company?
The median ROC % among Consumer Packaged Goods companies is 5.16, based on 1,948 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. Essity AB's current ROC % of 8.61% is 66.9% 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 Essity AB and its competitors. For the Consumer Packaged Goods industry, the median ROC % is 5.16 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Essity AB's current ROC % is 8.61%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Essity AB stock overvalued right now?
Based on GuruFocus' analysis, Essity AB (STU:ESWB) is currently considered Fairly Valued. The stock's GF Value™ is €24.15, compared to a current price of €24.40 — trading 1% above its estimated fair value. The current ROC % is 8.61% and 66.9% above the Consumer Packaged Goods industry median of 5.16. Essity AB's overall GF Score™ is 84/100 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 Essity AB (STU:ESWB), the current ROC % is 8.61% 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 Essity AB (STU:ESWB) Overvalued in 2026?
Based on GuruFocus' analysis, Essity AB stock appears to be overvalued.
The current stock price of €24.40 is trading 1% above its estimated GF Value™ of €24.15.
GuruFocus considers Essity AB to be Fairly Valued.
Key valuation signals for STU:ESWB:
ROC %: 8.61%
GF Value™: €24.15 vs. price of €24.40 (1% above fair value)
Industry Position: 66.9% above the Consumer Packaged Goods median
No single metric tells the full story. See the STU:ESWB stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Essity is a health and hygiene company spun out of Svenska Cellulosa in June 2017. Essity's products span the feminine care, baby care, toilet paper, facial tissue, and wet wipes categories, as well as hand soap, hand sanitizers, and tissue dispensers for institutional customers. Essity also offers medical solutions in the form of wound care, orthopedics, and compression therapy, accounting for around 8% of net sales. Essity operates in 150 markets and generates 61% of its revenue in Europe.
84GF Score
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