ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Dis-Chem Pharmacies's annualized return on invested capital (ROIC %) for the quarter that ended in Feb. 2026 was -13.60%.
As of today (2026-06-30), Dis-Chem Pharmacies's WACC % is 11.21%. Dis-Chem Pharmacies's ROIC % is -11.50% (calculated using TTM income statement data).
Dis-Chem Pharmacies earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Dis-Chem Pharmacies (JSE:DCP) 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, Dis-Chem Pharmacies's WACC % is 11.21%. Dis-Chem Pharmacies's ROIC % is -11.50% (calculated using TTM income statement data).
Dis-Chem Pharmacies 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 %, 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.
Dis-Chem Pharmacies ROIC % Related Terms
Dis-Chem Pharmacies ROIC % Historical Data
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The historical data trend for Dis-Chem Pharmacies's ROIC % 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.
For the Pharmaceutical Retailers subindustry, Dis-Chem Pharmacies'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.
Dis-Chem Pharmacies ROIC % vs Healthcare Providers & Services Industry
For the Healthcare Providers & Services industry and Healthcare sector, Dis-Chem Pharmacies's ROIC % distribution charts can be found below:
* The bar in red indicates where Dis-Chem Pharmacies's ROIC % falls into.
Note:
The Operating Income data used here is two times the semi-annual (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.
Dis-Chem Pharmacies (JSE:DCP) has a ROIC % of -13.60% 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 Dis-Chem Pharmacies and its competitors.
Is Dis-Chem Pharmacies' ROIC % too high?
Dis-Chem Pharmacies' current ROIC % is -13.60%. Overall, Dis-Chem Pharmacies has a GF Score™ of 88/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Dis-Chem Pharmacies' ROIC % compare to competitors?
Dis-Chem Pharmacies' ROIC % of -13.60% can be compared against companies in the Healthcare Providers & Services industry. The industry median ROIC % is 3.08. 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 Healthcare Providers & Services company?
The median ROIC % among Healthcare Providers & Services companies is 3.08, based on 668 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. 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 Dis-Chem Pharmacies and its competitors. For the Healthcare Providers & Services industry, the median ROIC % is 3.08 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Dis-Chem Pharmacies's current ROIC % is -13.60%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Dis-Chem Pharmacies stock overvalued right now?
Based on GuruFocus' analysis, Dis-Chem Pharmacies (JSE:DCP) is currently considered Modestly Undervalued. The stock's GF Value™ is R38.03, compared to a current price of R34.25 — trading 9.9% below its estimated fair value. The current ROIC % is -13.60%. Dis-Chem Pharmacies' 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 Dis-Chem Pharmacies (JSE:DCP), the current ROIC % is -13.60% 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 Dis-Chem Pharmacies (JSE:DCP) Overvalued in 2026?
Based on GuruFocus' analysis, Dis-Chem Pharmacies stock appears to be undervalued.
The current stock price of R34.25 is trading 9.9% below its estimated GF Value™ of R38.03.
GuruFocus considers Dis-Chem Pharmacies to be Modestly Undervalued.
Key valuation signals for JSE:DCP:
ROIC %: -13.60%
GF Value™: R38.03 vs. price of R34.25 (9.9% below fair value)
No single metric tells the full story. See the JSE:DCP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Dis-Chem Pharmacies Ltd is a pharmaceutical company based in South Africa. Its product portfolio includes personal care products, beauty products, healthcare and nutrition products, and dispensary and baby care products. The operating segments of the group are Retail and Wholesale. It derives maximum revenue from the Retail segment, which includes company stores, retailers of pharmaceuticals and a variety of health and beauty products, as well as pharma-logistic services and oncology and retailers of pharmaceutical products. The Wholesale segment consists of the CJ wholesale and company distribution businesses, wholesalers of pharmaceuticals, and a variety of health and beauty products. Geographically, the group carries out its business operations principally in South Africa.
88GF Score
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