ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Severn Trent's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 3.29%.
As of today (2026-06-25), Severn Trent's WACC % is 4.99%. Severn Trent's ROC % is 3.90% (calculated using TTM income statement data).
Severn Trent earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Severn Trent (OTCPK:SVTRF) 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, Severn Trent's WACC % is 4.99%. Severn Trent's ROC % is 3.90% (calculated using TTM income statement data).
Severn Trent 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.
Severn Trent ROC % Related Terms
Severn Trent ROC % Historical Data
* Premium members only.
The historical data trend for Severn Trent'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 two times the semi-annual (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.
Severn Trent (SVTRF) has a ROC % of 3.29% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Severn Trent and its competitors.
Is Severn Trent's ROC % too high?
Severn Trent's current ROC % is 3.29%. The Utilities - Regulated industry median ROC % is 4.18. Severn Trent's value of 3.29% is 21.3% below this industry median. Overall, Severn Trent has a GF Score™ of 80/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Severn Trent's ROC % compare to AWK and WTRG?
Severn Trent's ROC % of 3.29% can be compared against companies in the Utilities - Regulated industry. The industry median ROC % is 4.18. Severn Trent's value of 3.29% is 21.3% 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 an Utilities - Regulated company?
The median ROC % among Utilities - Regulated companies is 4.18, based on 501 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. Severn Trent's current ROC % of 3.29% is 21.3% 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 Severn Trent and its competitors. For the Utilities - Regulated industry, the median ROC % is 4.18 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Severn Trent's current ROC % is 3.29%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Severn Trent stock overvalued right now?
Based on GuruFocus' analysis, Severn Trent (SVTRF) is currently considered Modestly Undervalued. The stock's GF Value™ is $42.39, compared to a current price of $38.23 — trading 9.8% below its estimated fair value. The current ROC % is 3.29% and 21.3% below the Utilities - Regulated industry median of 4.18. Severn Trent's overall GF Score™ is 80/100 with 6 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 Severn Trent (SVTRF), the current ROC % is 3.29% 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 Severn Trent (SVTRF) Overvalued in 2026?
Based on GuruFocus' analysis, Severn Trent stock appears to be undervalued.
The current stock price of $38.23 is trading 9.8% below its estimated GF Value™ of $42.39.
GuruFocus considers Severn Trent to be Modestly Undervalued.
Key valuation signals for SVTRF:
ROC %: 3.29%
GF Value™: $42.39 vs. price of $38.23 (9.8% below fair value)
Industry Position: 21.3% below the Utilities - Regulated median
No single metric tells the full story. See the SVTRF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Severn Trent PLC is a United Kingdom-based water utilities company. It mainly operates in the U.K., but also in the United States and other countries in Europe. The company derives the majority of its revenue from its regulated water and wastewater segment, which supplies water and conducts sewage and environmental services. The company also operates a business services segment that is involved with renewable energy operations. The company provides contract services to industrial and municipal clients to develop water treatment facilities and networks. The firm generates its renewable energy by using hydropower, wind power, and solar power.
80GF Score
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