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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Densan Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 40.80%.
As of today (2026-07-14), Densan Co's WACC % is 2.96%. Densan Co's ROIC % is 28.06% (calculated using TTM income statement data).
Densan 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.
Densan Co (TSE:3640) 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, Densan Co's WACC % is 2.96%. Densan Co's ROIC % is 28.06% (calculated using TTM income statement data).
Densan 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.
Densan Co ROIC % Related Terms
Densan Co ROIC % Historical Data
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The historical data trend for Densan 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 Semiconductors subindustry, Densan 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.
Densan Co ROIC % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Densan Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Densan Co's ROIC % falls into.
Note:
The Operating Income data used here is two times the semi-annual (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.
Densan Co (TSE:3640) has a ROIC % of 40.80% 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 Densan Co and its competitors.
Is Densan Co's ROIC % too high?
Densan Co's current ROIC % is 40.80%. The Semiconductors industry median ROIC % is 3.77. Densan Co's value of 40.80% is 982.2% above this industry median. Overall, Densan Co has a GF Score™ of 69/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Densan Co's ROIC % compare to NVDA and AVGO?
Densan Co's ROIC % of 40.80% can be compared against companies in the Semiconductors industry. The industry median ROIC % is 3.77. Densan Co's value of 40.80% is 982.2% 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 a Semiconductors company?
The median ROIC % among Semiconductors companies is 3.77, based on 1,011 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. Densan Co's current ROIC % of 40.80% is 982.2% 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 Densan Co and its competitors. For the Semiconductors industry, the median ROIC % is 3.77 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Densan Co's current ROIC % is 40.80%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Densan Co stock overvalued right now?
Based on GuruFocus' analysis, Densan Co (TSE:3640) is currently considered Fairly Valued. The stock's GF Value™ is 円2,525.98, compared to a current price of 円2,414.00 — trading 4.4% below its estimated fair value. The current ROIC % is 40.80% and 982.2% above the Semiconductors industry median of 3.77. Densan Co's overall GF Score™ is 69/100. 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 Densan Co (TSE:3640), the current ROIC % is 40.80% 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 Densan Co (TSE:3640) Overvalued in 2026?
Based on GuruFocus' analysis, Densan Co stock appears to be undervalued.
The current stock price of 円2,414.00 is trading 4.4% below its estimated GF Value™ of 円2,525.98.
GuruFocus considers Densan Co to be Fairly Valued.
Key valuation signals for TSE:3640:
ROIC %: 40.80%
GF Value™: 円2,525.98 vs. price of 円2,414.00 (4.4% below fair value)
Industry Position: 982.2% above the Semiconductors median
No single metric tells the full story. See the TSE:3640 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Densan Co Ltd is engaged in the development and provision of information systems and related services. Its reporting segments include the Public Sector and the Industrial Sector. In the Public Sector, it serves local governments and related organizations by developing, selling, and supporting package systems, as well as offering equipment sales and information processing services. The Industrial Sector focuses on private enterprises and medical and welfare institutions, offering software development, equipment sales, and various information services. It also includes internet connectivity services for general consumers. It generates the majority of its revenue from the Public Sector segment.
69GF Score
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