ROIC (return on invested capital): what it is and how to read it
ROIC measures the return on the money invested in the business, whether it comes from shareholders or from debt. Many investors' favourite gauge of whether a company creates value.
How it is calculated
ROIC = after-tax operating profit / (shareholders' equity + net debt). In MeridIAn it is an approximation.
How to read it
If ROIC exceeds what the company pays for its funding (around 8-10% for many companies), each unit it reinvests creates value. A high, stable ROIC over many years is typical of businesses with lasting advantages.
ROIC in the MeridIAn ranking
Among the 1,590 companies in the ranking with data, the median ROIC is 12.6%: half are below and half above. The lowest 25% are below 7.3% and the highest 25% above 19.7%.
For example: NVIDIA, 74.9%; Apple, 79.4%; Alphabet, 20.4%; Inditex, 32.5%.
By sector
| Sector | Median | Companies with data |
|---|---|---|
| Basic Materials | 13.0% | 139 |
| Communication Services | 11.6% | 94 |
| Consumer Cyclical | 12.4% | 211 |
| Consumer Defensive | 12.9% | 122 |
| Energy | 15.0% | 100 |
| Healthcare | 12.1% | 190 |
| Industrials | 14.2% | 374 |
| Technology | 12.9% | 269 |
| Utilities | 6.0% | 91 |
Highest ROIC
What to watch out for
It is not used for banks or insurers. It can swing a lot from year to year in cyclical companies.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.