ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Ferguson Enterprises's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 13.45%.
As of today (2026-06-26), Ferguson Enterprises's WACC % is 11.35%. Ferguson Enterprises's ROIC % is 17.37% (calculated using TTM income statement data).
Ferguson Enterprises 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.
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, Ferguson Enterprises's WACC % is 11.35%. Ferguson Enterprises's ROIC % is 17.37% (calculated using TTM income statement data).
Ferguson Enterprises 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 Industrial Distribution subindustry, Ferguson Enterprises'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.
Ferguson Enterprises ROIC % vs Industrial Distribution Industry
For the Industrial Distribution industry and Industrials sector, Ferguson Enterprises's ROIC % distribution charts can be found below:
* The bar in red indicates where Ferguson Enterprises's ROIC % falls into.
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.
Ferguson Enterprises (FERG) has a ROIC % of 13.45% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Ferguson Enterprises and its competitors.
Is Ferguson Enterprises' ROIC % too high?
Ferguson Enterprises' current ROIC % is 13.45%. The Industrial Distribution industry median ROIC % is 6.25. Ferguson Enterprises' value of 13.45% is 115.4% above this industry median. Overall, Ferguson Enterprises has a GF Score™ of 88/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Ferguson Enterprises' ROIC % compare to FAST and GWW?
Ferguson Enterprises' ROIC % of 13.45% can be compared against companies in the Industrial Distribution industry. The industry median ROIC % is 6.25. Ferguson Enterprises' value of 13.45% is 115.4% 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 an Industrial Distribution company?
The median ROIC % among Industrial Distribution companies is 6.25, based on 156 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. Ferguson Enterprises's current ROIC % of 13.45% is 115.4% 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 Ferguson Enterprises and its competitors. For the Industrial Distribution industry, the median ROIC % is 6.25 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Ferguson Enterprises's current ROIC % is 13.45%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Ferguson Enterprises stock overvalued right now?
Based on GuruFocus' analysis, Ferguson Enterprises (FERG) is currently considered Fairly Valued. The stock's GF Value™ is $229.93, compared to a current price of $237.53 — trading 3.3% above its estimated fair value. The current ROIC % is 13.45% and 115.4% above the Industrial Distribution industry median of 6.25. Ferguson Enterprises' overall GF Score™ is 88/100 with 3 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 Ferguson Enterprises (FERG), the current ROIC % is 13.45% 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 Ferguson Enterprises (FERG) Overvalued in 2026?
Based on GuruFocus' analysis, Ferguson Enterprises stock appears to be overvalued.
The current stock price of $237.53 is trading 3.3% above its estimated GF Value™ of $229.93.
GuruFocus considers Ferguson Enterprises to be Fairly Valued.
Key valuation signals for FERG:
ROIC %: 13.45%
GF Value™: $229.93 vs. price of $237.53 (3.3% above fair value)
Industry Position: 115.4% above the Industrial Distribution median
No single metric tells the full story. See the FERG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Ferguson distributes plumbing and HVAC products to North American repair, maintenance, and improvement, new construction, and civil infrastructure markets. It serves over 1 million customers and sources products from 37,000 suppliers. Ferguson engages customers through approximately 1,700 North American branches, over the phone, online, and in residential showrooms. The firm sold its UK business in 2021 and is now solely focused on the North American market.
88GF Score
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