ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Kumagai Gumi Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 7.97%.
As of today (2026-06-30), Kumagai Gumi Co's WACC % is 4.21%. Kumagai Gumi Co's ROIC % is 5.71% (calculated using TTM income statement data).
Kumagai Gumi 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.
Kumagai Gumi Co (OTCPK:KMGGF) 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, Kumagai Gumi Co's WACC % is 4.21%. Kumagai Gumi Co's ROIC % is 5.71% (calculated using TTM income statement data).
Kumagai Gumi 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.
Kumagai Gumi Co ROIC % Related Terms
Kumagai Gumi Co ROIC % Historical Data
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The historical data trend for Kumagai Gumi Co'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 Engineering & Construction subindustry, Kumagai Gumi 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.
Kumagai Gumi Co ROIC % vs Construction Industry
For the Construction industry and Industrials sector, Kumagai Gumi Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Kumagai Gumi Co'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.
Kumagai Gumi Co (KMGGF) has a ROIC % of 7.97% 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 Kumagai Gumi Co and its competitors.
Is Kumagai Gumi Co's ROIC % too high?
Kumagai Gumi Co's current ROIC % is 7.97%. The Construction industry median ROIC % is 4.66. Kumagai Gumi Co's value of 7.97% is 71% above this industry median. Overall, Kumagai Gumi Co has a GF Score™ of 79/100, reflecting its overall financial health beyond just this single metric.
How does Kumagai Gumi Co's ROIC % compare to PWR and FIX?
Kumagai Gumi Co's ROIC % of 7.97% can be compared against companies in the Construction industry. The industry median ROIC % is 4.66. Kumagai Gumi Co's value of 7.97% is 71% 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 Construction company?
The median ROIC % among Construction companies is 4.66, based on 1,750 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. Kumagai Gumi Co's current ROIC % of 7.97% is 71% 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 Kumagai Gumi Co and its competitors. For the Construction industry, the median ROIC % is 4.66 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Kumagai Gumi Co's current ROIC % is 7.97%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Kumagai Gumi Co stock overvalued right now?
Kumagai Gumi Co (KMGGF) has a current ROIC % of 7.97%. The stock's GF Value™ is $8.45, compared to a current price of $8.70 — trading 3% above its estimated fair value. The current ROIC % is 7.97% and 71% above the Construction industry median of 4.66. Kumagai Gumi Co's overall GF Score™ is 79/100 with 5 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 Kumagai Gumi Co (KMGGF), the current ROIC % is 7.97% 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 Kumagai Gumi Co (KMGGF) Overvalued in 2026?
Based on GuruFocus' analysis, Kumagai Gumi Co stock appears to be overvalued.
The current stock price of $8.70 is trading 3% above its estimated GF Value™ of $8.45.
Key valuation signals for KMGGF:
ROIC %: 7.97%
GF Value™: $8.45 vs. price of $8.70 (3% above fair value)
Industry Position: 71% above the Construction median
No single metric tells the full story. See the KMGGF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Kumagai Gumi Co Ltd is a Japanese company that provides services in construction and civil engineering. The company analyzes, designs, and supervises complex construction projects. It also offers engineering and technical services throughout the construction process. These projects include roads, railways, airports, water systems, and other public facilities. In addition, the company is engaged in manufacturing and selling construction materials and machinery. Construction activities account for the majority of revenue. The company generates additional revenue from developing residential and commercial complexes and either operating the building or acting as a broker and selling the real estate.
79GF Score
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