ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Parker Hannifin's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 13.45%.
As of today (2026-06-24), Parker Hannifin's WACC % is 11.37%. Parker Hannifin's ROIC % is 13.62% (calculated using TTM income statement data).
Parker Hannifin 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.
Parker Hannifin (NYSE:PH) 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, Parker Hannifin's WACC % is 11.37%. Parker Hannifin's ROIC % is 13.62% (calculated using TTM income statement data).
Parker Hannifin 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.
Parker Hannifin ROIC % Related Terms
Parker Hannifin ROIC % Historical Data
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The historical data trend for Parker Hannifin'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 Specialty Industrial Machinery subindustry, Parker Hannifin'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.
Parker Hannifin ROIC % vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Parker Hannifin's ROIC % distribution charts can be found below:
* The bar in red indicates where Parker Hannifin'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.
Parker Hannifin (PH) 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 Parker Hannifin and its competitors.
Is Parker Hannifin's ROIC % too high?
Parker Hannifin's current ROIC % is 13.45%. The Industrial Products industry median ROIC % is 5.23. Parker Hannifin's value of 13.45% is 157.2% above this industry median. Overall, Parker Hannifin has a GF Score™ of 93/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Parker Hannifin's ROIC % compare to CMI and EMR?
Parker Hannifin's ROIC % of 13.45% can be compared against companies in the Industrial Products industry. The industry median ROIC % is 5.23. Parker Hannifin's value of 13.45% is 157.2% 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 Products company?
The median ROIC % among Industrial Products companies is 5.23, based on 3,039 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. Parker Hannifin's current ROIC % of 13.45% is 157.2% 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 Parker Hannifin and its competitors. For the Industrial Products industry, the median ROIC % is 5.23 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Parker Hannifin'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 Parker Hannifin stock overvalued right now?
Based on GuruFocus' analysis, Parker Hannifin (PH) is currently considered Significantly Overvalued. The stock's GF Value™ is $678.13, compared to a current price of $964.95 — trading 42.3% above its estimated fair value. The current ROIC % is 13.45% and 157.2% above the Industrial Products industry median of 5.23. Parker Hannifin's overall GF Score™ is 93/100 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 Parker Hannifin (PH), 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 Parker Hannifin (PH) Overvalued in 2026?
Based on GuruFocus' analysis, Parker Hannifin stock appears to be overvalued.
The current stock price of $964.95 is trading 42.3% above its estimated GF Value™ of $678.13.
GuruFocus considers Parker Hannifin to be Significantly Overvalued.
Key valuation signals for PH:
ROIC %: 13.45%
GF Value™: $678.13 vs. price of $964.95 (42.3% above fair value)
Industry Position: 157.2% above the Industrial Products median
No single metric tells the full story. See the PH stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Parker Hannifin started out in 1917 as Parker Appliance, selling pneumatic brakes. Through the acquisition of branded components, the firm has expanded into aerospace engines, agricultural and construction machinery, freight and passenger vehicles, and industrial automation equipment. Within these larger systems, Parker sells a wide array of small, critical pieces such as hydraulic, electromechanical, climate control, and filtration components. Many of its products are designed to work together, resulting in a high rate of cross-selling.
93GF Score
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