ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. MSC Industrial Direct Co's annualized return on invested capital (ROIC %) for the quarter that ended in Feb. 2026 was 9.78%.
As of today (2026-06-29), MSC Industrial Direct Co's WACC % is 8.64%. MSC Industrial Direct Co's ROIC % is 11.90% (calculated using TTM income statement data).
MSC Industrial Direct Co 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.
MSC Industrial Direct Co (FRA:98M) 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, MSC Industrial Direct Co's WACC % is 8.64%. MSC Industrial Direct Co's ROIC % is 11.90% (calculated using TTM income statement data).
MSC Industrial Direct Co 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, MSC Industrial Direct Co'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.
MSC Industrial Direct Co ROIC % vs Industrial Distribution Industry
For the Industrial Distribution industry and Industrials sector, MSC Industrial Direct Co's ROIC % distribution charts can be found below:
* The bar in red indicates where MSC Industrial Direct Co's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Feb. 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.
MSC Industrial Direct Co (FRA:98M) has a ROIC % of 9.78% as of Feb. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on MSC Industrial Direct Co and its competitors.
Is MSC Industrial Direct Co's ROIC % too high?
MSC Industrial Direct Co's current ROIC % is 9.78%. The Industrial Distribution industry median ROIC % is 6.21. MSC Industrial Direct Co's value of 9.78% is 57.5% above this industry median. Overall, MSC Industrial Direct Co has a GF Score™ of 78/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does MSC Industrial Direct Co's ROIC % compare to POOL and XMTR?
MSC Industrial Direct Co's ROIC % of 9.78% can be compared against companies in the Industrial Distribution industry. The industry median ROIC % is 6.21. MSC Industrial Direct Co's value of 9.78% is 57.5% 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 6.21, based on 155 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. MSC Industrial Direct Co's current ROIC % of 9.78% is 57.5% 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 MSC Industrial Direct Co and its competitors. For the Industrial Distribution industry, the median ROIC % is 6.21 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. MSC Industrial Direct Co's current ROIC % is 9.78%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is MSC Industrial Direct Co stock overvalued right now?
Based on GuruFocus' analysis, MSC Industrial Direct Co (FRA:98M) is currently considered Modestly Overvalued. The stock's GF Value™ is €80.16, compared to a current price of €103.90 — trading 29.6% above its estimated fair value. The current ROIC % is 9.78% and 57.5% above the Industrial Distribution industry median of 6.21. MSC Industrial Direct Co's overall GF Score™ is 78/100 with 8 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 MSC Industrial Direct Co (FRA:98M), the current ROIC % is 9.78% as of Feb. 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 MSC Industrial Direct Co (FRA:98M) Overvalued in 2026?
Based on GuruFocus' analysis, MSC Industrial Direct Co stock appears to be overvalued.
The current stock price of €103.90 is trading 29.6% above its estimated GF Value™ of €80.16.
GuruFocus considers MSC Industrial Direct Co to be Modestly Overvalued.
Key valuation signals for FRA:98M:
ROIC %: 9.78%
GF Value™: €80.16 vs. price of €103.90 (29.6% above fair value)
Industry Position: 57.5% above the Industrial Distribution median
No single metric tells the full story. See the FRA:98M stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Founded in 1941, MSC Industrial Direct originally manufactured and sold cutting tools to metalworking shops in New York. Through a series of acquisitions and organic expansions, MSC has grown into an industrial distribution powerhouse with a focus on specialized metalworking products and services. The firm also distributes a wide breadth of maintenance, repair, and operations supplies. MSC primarily operates in North America, where it derives over 95% of its revenue.
78GF Score
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