South Jersey Industries (South Jersey Industries) ROIC % : 0.82% (As of Sep. 2022)

View and export this data going back to 2021. Start your Free Trial

What is South Jersey Industries ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. South Jersey Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2022 was 0.82%.

As of today (2024-05-25), South Jersey Industries's WACC % is 4.82%. South Jersey Industries's ROIC % is 3.66% (calculated using TTM income statement data). South Jersey Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.

South Jersey Industries ROIC % Historical Data

The historical data trend for South Jersey Industries'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.

* Premium members only.

South Jersey Industries ROIC % Chart

South Jersey Industries Annual Data

Trend

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

ROIC %

Get a 7-Day Free Trial

0.79

3.49

2.35

3.40

3.86

South Jersey Industries Quarterly Data
	Dec17	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22
ROIC %	Get a 7-Day Free Trial															-0.37	6.83	8.38	-0.26	0.82

Competitive Comparison of South Jersey Industries's ROIC %

For the Utilities - Diversified subindustry, South Jersey Industries'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.

South Jersey Industries's ROIC % Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, South Jersey Industries's ROIC % distribution charts can be found below:

* The bar in red indicates where South Jersey Industries's ROIC % falls into.

South Jersey Industries ROIC % Calculation

South Jersey Industries's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:

	ROIC % (A: Dec. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2020 )	+	Invested Capital (A: Dec. 2021 ))	/ count )
=	349.12 * ( 1 - 20.79% )	/	( (7062.198	+	7266.68)	/ 2 )
=	276.537952	/	7164.439
=	3.86 %

where

	Invested Capital		(A: Dec. 2020 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	6689.148	-	283.754	-	( 34.045	-	max(0, 1163.632	-	506.828	+	34.045	))
=	7062.198

	Invested Capital		(A: Dec. 2021 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	7308.672	-	358.712	-	( 28.754	-	max(0, 955.682	-	638.962	+	28.754	))
=	7266.68

South Jersey Industries's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2022 is calculated as:

	ROIC % (Q: Sep. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2022 )	+	Invested Capital (Q: Sep. 2022 ))	/ count )
=	45.6 * ( 1 - -37.7% )	/	( (7576.825	+	7679.641)	/ 2 )
=	62.7912	/	7628.233
=	0.82 %

where

	Invested Capital		(Q: Jun. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	7660.601	-	494.56	-	( 53.472	-	max(0, 1119.399	-	708.615	+	53.472	))
=	7576.825

	Invested Capital		(Q: Sep. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	7917.948	-	560.46	-	( 52.763	-	max(0, 1086.558	-	764.405	+	52.763	))
=	7679.641

Note: The Operating Income data used here is four times the quarterly (Sep. 2022) data.

South Jersey Industries (OTCPK:SJIIU) 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, South Jersey Industries's WACC % is 4.82%. South Jersey Industries's ROIC % is 3.66% (calculated using TTM income statement data).

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.

South Jersey Industries ROIC % Related Terms

Thank you for viewing the detailed overview of South Jersey Industries's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.

South Jersey Industries (South Jersey Industries) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » South Jersey Industries Inc (OTCPK:SJIIU) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

1 South Jersey Plaza, Folsom, NJ, USA, 08037

Website

https://www.sjindustries.com

South Jersey Industries Inc is a New Jersey holding company that acquires and develops utility companies. Through its many subsidiaries, SJI is primarily involved in transmitting, distributing, and selling natural gas and electricity in the mid-Atlantic U.S. The company segments its operations into gas utility operations and energy group businesses. The majority of SJI's total revenue comes from its gas utility operations, which encompasses the company's principal subsidiary: South Jersey Gas. SJG purchases, transmit, and sells natural gas primarily for residential consumers in southern New Jersey. The energy group also represents a significant income stream through its wholesale energy and retail electric services.