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Atkore WACC %

:14.72% (As of Today)
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As of today (2022-08-12), Atkore's weighted average cost of capital is 14.72%. Atkore's ROIC % is 58.40% (calculated using TTM income statement data). Atkore 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.


Atkore WACC % Historical Data

The historical data trend for Atkore's WACC % 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.

Atkore Annual Data
Trend Sep13 Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21
WACC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.68 7.53 9.77 8.11 14.15

Atkore Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
WACC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.72 14.15 14.35 14.38 14.73

Competitive Comparison

For the Electrical Equipment & Parts subindustry, Atkore's WACC %, along with its competitors' market caps and WACC % 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.

   

Atkore WACC % Distribution

For the Industrial Products industry and Industrials sector, Atkore's WACC % distribution charts can be found below:

* The bar in red indicates where Atkore's WACC % falls into.



Atkore WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Atkore's market capitalization (E) is $3808.132 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Jun. 2022, Atkore's latest two-year average Short-Term Debt & Capital Lease Obligation was $13.7855 Mil and its latest two-year average Long-Term Debt & Capital Lease Obligation was $808.2505 Mil. The total Book Value of Debt (D) is $822.036 Mil.
a) weight of equity = E / (E + D) = 3808.132 / (3808.132 + 822.036) = 0.8225
b) weight of debt = D / (E + D) = 822.036 / (3808.132 + 822.036) = 0.1775

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 2.84200000%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Atkore's beta is 2.40.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 2.84200000% + 2.40 * 6% = 17.242%

3. Cost of Debt:
GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.
As of Sep. 2021, Atkore's interest expense (positive number) was $32.899 Mil. Its total Book Value of Debt (D) is $822.036 Mil.
Cost of Debt = 32.899 / 822.036 = 4.0021%.

4. Multiply by one minus Average Tax Rate:
GuruFocus uses the latest two-year average tax rate to do the calculation. The calculated average tax rate is limited to between 0% and 100%. If the calculated average tax rate is higher than 100%, it is set to 100%. If the calculated average tax rate is less than 0%, it is set to 0%.
The latest Two-year Average Tax Rate is 24.615%.

Atkore's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.8225*17.242%+0.1775*4.0021%*(1 - 24.615%)
=14.72%

* 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.


Atkore  (NYSE:ATKR) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % 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, Atkore's weighted average cost of capital is 14.72%. Atkore's ROIC % is 58.40% (calculated using TTM income statement data). Atkore 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

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.


Related Terms

Atkore Business Description

Atkore logo
Traded in Other Exchanges
Address
16100 South Lathrop Avenue, Harvey, IL, USA, 60426
Atkore is a diversified industrials company and a leading manufacturer of electrical, mechanical, and safety infrastructure solutions. Atkore has two business segments: electrical and safety and infrastructure. Net sales are highest in the electrical business line as well as in the United States. The key product categories in the electrical segment are PVC conduit, steel conduit, and PVC-coated conduit, which are staples for electrical distributors. The key product categories in the safety and infrastructure segment include in-line galvanized mechanical tube, metal framing and related fittings, and security bollards. Also, the company provides ancillary services to customers in the form of slitting and cutting structural steel sheets.
Executives
Pregenzer John W officer: President, Electrical 16100 S LATHROP AVENUE HARVEY IL 60426
Lowe Leangela W. officer: VP, Global Human Resources 16100 S. LATHROP AVENUE HARVEY IL 60426
Lamps Mark F. officer: Pres. Mech. Prods. & Solutions 16100 S. LATHROP AVENUE HARVEY IL 60426
Johnson David Paul officer: Vice President and CFO 16100 SOUTH LATHROP AVENUE HARVEY IL 60426
Johnson Betty R. director 20 LAKE VIEW ROAD HAWTHORN WOODS IL 60047
Schrock Michael V director 5500 WAYZATA BLVD. SUITE 800 GOLDEN VALLEY MN 55416
James Wilbert W Jr director 16100 SOUTH LATHROP AVENUE HARVEY IL 60426
Kershaw Justin A director 16100 SOUTH LATHROP AVENUE HARVEY IL 60426
Schulte Michael J officer: Pres, Mech. Prods. & Solutions 16100 SOUTH LATHROP AVENUE HARVEY IL 60426
Muse Scott H director C/O RICHARD W DAVIES HUBBELL INC 684 DERBY MILFORD RD ORANGE CT 06477
Vanarsdale William director 16100 SOUTH LATHROP AVENUE HARVEY IL 60426
Waltz William E Jr. officer: President, Conduit & Fittings 16100 SOUTH LATHROP AVENUE HARVEY IL 60426
Mallak James A officer: VP and Chief Financial Officer 27175 HAGGERTY RD NOVI MI 48377
Fitzpatrick Kevin P officer: VP, Global Human Resources 3400 N. WOLF FRANKLIN PARK IL 60131
Williamson John Patrick officer: President and CEO 16100 SOUTH LATHROP AVENUE HARVEY IL 60426

Atkore Headlines

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