Return on Retained Earnings (RORE) is an indicator of a company's growth potential, it shows how much a company earns by reinvesting its retained earnings, i.e. profits after dividend payments.
Rolls-Royce Holdings's 5-Year RORE % for the quarter that ended in Dec. 2025 was 66.64%.
The industry rank for Rolls-Royce Holdings's 5-Year RORE % or its related term are showing as below:
RYCEF's 5-Year RORE % is ranked better than 87% of 277
companies
in the Aerospace & Defense industry
Industry Median: 9.94
vs RYCEF: 66.64
Return on Retained Earnings (RORE) is important to investors because it reveals a company's efficiency and growth potential. A higher RORE indicates a higher return. A high RORE indicates that the company should reinvest profits into the business. A lower RORE suggests that the company should distribute profits to shareholders by paying out dividends, since those dollars aren't generating much additional growth for the company.
There are a several different ways to arrive at the Return on Retained Earnings. The simplest way to calculate it is by using published information on Earnings per Share (EPS) and Dividend per Share (DPS) over a selected period. Here, 5-year period is chosen.
Be Aware
Please keep in mind that the RORE is relative to the nature of the business and its competitors. If another company in the same sector is producing a lower return on retained earnings, it doesn’t necessarily mean it’s a bad investment. It may just suggest the company is older and no longer in a high growth stage. At such a stage in the business cycle, it would be expected to see a lower RORE and higher dividend payout.
Rolls-Royce Holdings 5-Year RORE % Related Terms
Rolls-Royce Holdings 5-Year RORE % Historical Data
* Premium members only.
The historical data trend for Rolls-Royce Holdings's 5-Year RORE % 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 Aerospace & Defense subindustry, Rolls-Royce Holdings's 5-Year RORE %, along with its competitors' market caps and 5-Year RORE % 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.
Rolls-Royce Holdings 5-Year RORE % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Rolls-Royce Holdings's 5-Year RORE % distribution charts can be found below:
* The bar in red indicates where Rolls-Royce Holdings's 5-Year RORE % falls into.
* 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.
In the calculation of 5-Year RORE %, the most recent and first period EPS (Diluted) is the trailing twelve months (TTM) data ended in Dec. 2025 and 5-year before.
Rolls-Royce Holdings (RYCEF) has a 5-Year RORE % of 66.64 as of Dec. 2025. 5-Year RORE % shows how much a company earns by reinvesting its retained earnings in 5-year. View historical data on Rolls-Royce Holdings and its competitors. According to the industry distribution chart, Rolls-Royce Holdings ranks #36 out of 277 companies in the Aerospace & Defense industry, placing it in the top 13%.
Is Rolls-Royce Holdings' 5-Year RORE % too high?
Rolls-Royce Holdings' current 5-Year RORE % is 66.64. The Aerospace & Defense industry median 5-Year RORE % is 9.94. Rolls-Royce Holdings' value of 66.64 is 570.4% above this industry median. Based on the distribution chart, Rolls-Royce Holdings ranks #36 out of 277 companies in the Aerospace & Defense industry, which is in the top quartile — a strong position relative to peers. Overall, Rolls-Royce Holdings has a GF Score™ of 69/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Rolls-Royce Holdings' 5-Year RORE % compare to SPCX and GE?
According to the Aerospace & Defense industry distribution chart, Rolls-Royce Holdings ranks #36 out of 277 companies for 5-Year RORE %. This places Rolls-Royce Holdings in the top 13% of its industry — outperforming the majority of peers. The industry median 5-Year RORE % is 9.94. Rolls-Royce Holdings' value of 66.64 is 570.4% 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 5-Year RORE % for an Aerospace & Defense company?
The median 5-Year RORE % among Aerospace & Defense companies is 9.94, based on 277 companies in the industry. Companies in the top quartile (top 25%) have a 5-Year RORE % significantly above this median, while those in the bottom quartile fall well below. However, 5-Year RORE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Rolls-Royce Holdings's current 5-Year RORE % of 66.64 is 570.4% 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 5-Year RORE % mean?
A high 5-Year RORE % can signal that a stock is expensive relative to its fundamentals. 5-Year RORE % shows how much a company earns by reinvesting its retained earnings in 5-year. View historical data on Rolls-Royce Holdings and its competitors. For the Aerospace & Defense industry, the median 5-Year RORE % is 9.94 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Rolls-Royce Holdings's current 5-Year RORE % is 66.64. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Rolls-Royce Holdings stock overvalued right now?
Based on GuruFocus' analysis, Rolls-Royce Holdings (RYCEF) is currently considered Significantly Overvalued. The stock's GF Value™ is $8.23, compared to a current price of $19.68 — trading 139.1% above its estimated fair value. The current 5-Year RORE % is 66.64 and 570.4% above the Aerospace & Defense industry median of 9.94. Rolls-Royce Holdings' overall GF Score™ is 69/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is 5-Year RORE % calculated?
5-Year RORE % is calculated from a company's financial statements. For Rolls-Royce Holdings (RYCEF), the current 5-Year RORE % is 66.64 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 Rolls-Royce Holdings (RYCEF) Overvalued in 2026?
Based on GuruFocus' analysis, Rolls-Royce Holdings stock appears to be overvalued.
The current stock price of $19.68 is trading 139.1% above its estimated GF Value™ of $8.23.
GuruFocus considers Rolls-Royce Holdings to be Significantly Overvalued.
Key valuation signals for RYCEF:
5-Year RORE %: 66.64
GF Value™: $8.23 vs. price of $19.68 (139.1% above fair value)
Industry Position: 570.4% above the Aerospace & Defense median (#36 of 277)
No single metric tells the full story. See the RYCEF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Rolls-Royce operates three core business segments: civil aerospace, power systems, and defense. The civil aerospace segment builds engines powering wide-body aircraft, regional and business jets, and offers aftermarket services. Twenty years ago, the firm pioneered full-service flight hour contracts with the TotalCare package. Power systems provides power solutions to multiple end markets (defense, agriculture, marine, and power generation) while the defense business provides military, ground vehicle and naval propulsion solutions.
69GF Score
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5-Year RORE % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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