ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Universal Music Group NV's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2025 was 11.93%.
As of today (2026-06-30), Universal Music Group NV's WACC % is 8.45%. Universal Music Group NV's ROIC % is 10.70% (calculated using TTM income statement data).
Universal Music Group NV 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.
Universal Music Group NV (CHIX:UMGa) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Universal Music Group NV's WACC % is 8.45%. Universal Music Group NV's ROIC % is 10.70% (calculated using TTM income statement data).
Universal Music Group NV 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 %, ROIC % 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.
* 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.
For the Entertainment subindustry, Universal Music Group NV's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Universal Music Group NV ROIC % vs Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Universal Music Group NV's ROIC % distribution charts can be found below:
* The bar in red indicates where Universal Music Group NV's ROIC % falls into.
Note:
The Operating Income data used here is two times the semi-annual (Dec. 2025) 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.
Universal Music Group NV (CHIX:UMGA) has a ROIC % of 11.93% as of Dec. 2025. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Universal Music Group NV and its competitors.
Is Universal Music Group NV's ROIC % too high?
Universal Music Group NV's current ROIC % is 11.93%. The Media - Diversified industry median ROIC % is 1.40. Universal Music Group NV's value of 11.93% is 752.1% above this industry median. Overall, Universal Music Group NV has a GF Score™ of 75/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Universal Music Group NV's ROIC % compare to NFLX and DIS?
Universal Music Group NV's ROIC % of 11.93% can be compared against companies in the Media - Diversified industry. The industry median ROIC % is 1.40. Universal Music Group NV's value of 11.93% is 752.1% 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 ROIC % for a Media - Diversified company?
The median ROIC % among Media - Diversified companies is 1.40, based on 1,009 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Universal Music Group NV's current ROIC % of 11.93% is 752.1% 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 ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Universal Music Group NV and its competitors. For the Media - Diversified industry, the median ROIC % is 1.40 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Universal Music Group NV's current ROIC % is 11.93%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Universal Music Group NV stock overvalued right now?
Based on GuruFocus' analysis, Universal Music Group NV (CHIX:UMGA) is currently considered Possible Value Trap. The stock's GF Value™ is €27.36, compared to a current price of €18.11 — trading 33.8% below its estimated fair value. The current ROIC % is 11.93% and 752.1% above the Media - Diversified industry median of 1.40. Universal Music Group NV's overall GF Score™ is 75/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Universal Music Group NV (CHIX:UMGA), the current ROIC % is 11.93% as of Dec. 2025. 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 Universal Music Group NV (CHIX:UMGA) Overvalued in 2026?
Based on GuruFocus' analysis, Universal Music Group NV stock appears to be undervalued.
The current stock price of €18.11 is trading 33.8% below its estimated GF Value™ of €27.36.
GuruFocus considers Universal Music Group NV to be Possible Value Trap.
Key valuation signals for CHIX:UMGA:
ROIC %: 11.93%
GF Value™: €27.36 vs. price of €18.11 (33.8% below fair value)
Industry Position: 752.1% above the Media - Diversified median
No single metric tells the full story. See the CHIX:UMGA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Universal Music is the largest of the three major record companies. Recorded music accounts for most of the firm's revenue, with the segment housing more than a dozen record labels, including notable names like Interscope, Capital Music, Motown Records, and Def Jam. Some of the most successful current artists signed to record deals with Universal include Taylor Swift, Drake, The Weeknd, and Morgan Wallen. Most of Universal's remaining sales come from its publishing segment, which generates revenue for songwriters and composers, including some of Universal's recording artists as well as songwriters and composers who do not record music themselves or are attached to other labels. Universal's publishing group has nearly 4.5 million owned or administered titles in its catalog.
75GF Score
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