ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Sumitomo Electric Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2025 was 8.76%.
As of today (2026-06-25), Sumitomo Electric Industries's WACC % is 11.54%. Sumitomo Electric Industries's ROIC % is 8.73% (calculated using TTM income statement data).
Sumitomo Electric Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Sumitomo Electric Industries (OTCPK:SMTOY) 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, Sumitomo Electric Industries's WACC % is 11.54%. Sumitomo Electric Industries's ROIC % is 8.73% (calculated using TTM income statement data).
Sumitomo Electric Industries 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.
Sumitomo Electric Industries ROIC % Related Terms
Sumitomo Electric Industries ROIC % Historical Data
* 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 Auto Parts subindustry, Sumitomo Electric 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.
Sumitomo Electric Industries ROIC % vs Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Sumitomo Electric Industries's ROIC % distribution charts can be found below:
* The bar in red indicates where Sumitomo Electric Industries's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Dec. 2025) 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.
Sumitomo Electric Industries (SMTOY) has a ROIC % of 8.76% as of Dec. 2025. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Sumitomo Electric Industries and its competitors.
Is Sumitomo Electric Industries' ROIC % too high?
Sumitomo Electric Industries' current ROIC % is 8.76%. The Vehicles & Parts industry median ROIC % is 5.07. Sumitomo Electric Industries' value of 8.76% is 72.8% above this industry median. Overall, Sumitomo Electric Industries has a GF Score™ of 76/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Sumitomo Electric Industries' ROIC % compare to ORLY and AZO?
Sumitomo Electric Industries' ROIC % of 8.76% can be compared against companies in the Vehicles & Parts industry. The industry median ROIC % is 5.07. Sumitomo Electric Industries' value of 8.76% is 72.8% 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 Vehicles & Parts company?
The median ROIC % among Vehicles & Parts companies is 5.07, based on 1,316 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. Sumitomo Electric Industries's current ROIC % of 8.76% is 72.8% 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 Sumitomo Electric Industries and its competitors. For the Vehicles & Parts industry, the median ROIC % is 5.07 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Sumitomo Electric Industries's current ROIC % is 8.76%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Sumitomo Electric Industries stock overvalued right now?
Based on GuruFocus' analysis, Sumitomo Electric Industries (SMTOY) is currently considered Significantly Overvalued. The stock's GF Value™ is $18.81, compared to a current price of $75.18 — trading 299.7% above its estimated fair value. The current ROIC % is 8.76% and 72.8% above the Vehicles & Parts industry median of 5.07. Sumitomo Electric Industries' overall GF Score™ is 76/100 with 4 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 Sumitomo Electric Industries (SMTOY), the current ROIC % is 8.76% as of Dec. 2025. 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 Sumitomo Electric Industries (SMTOY) Overvalued in 2026?
Based on GuruFocus' analysis, Sumitomo Electric Industries stock appears to be overvalued.
The current stock price of $75.18 is trading 299.7% above its estimated GF Value™ of $18.81.
GuruFocus considers Sumitomo Electric Industries to be Significantly Overvalued.
Key valuation signals for SMTOY:
ROIC %: 8.76%
GF Value™: $18.81 vs. price of $75.18 (299.7% above fair value)
Industry Position: 72.8% above the Vehicles & Parts median
No single metric tells the full story. See the SMTOY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Sumitomo Electric Industries Ltd manufactures and sells electric wires and cables, and other products. The company operates through five segments. The Automotive related business covers wire harnesses, anti-vibration rubber, hoses, electrical parts, and traffic control systems. The Electronics related business provides electronic wires, flexible printed circuits, fluoropolymer products, and metal components. The Environment and Energy related business handles power transmission equipment, substation systems, vacuum and beam equipment, and conductive products. The Industrial Materials business includes steel wire, tools, optical components, and sintered parts. The Information and Communication business offers fiber optic cables, communication equipment, and optical devices.
76GF Score
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