Earlier it was mentioned that a high ROIC that exceeds the cost of capital is how a firm creates value.

Source: https://seekingalpha.com/article/4573768-hologic-stock-deserves-trade-high-earnings-multiple?source=feed_all_articles

Efficiency is represented by the operating margin, and profitability by the ROIC.

Source: https://seekingalpha.com/article/4579762-doximity-good-business-extremely-overvalued?source=feed_all_articles

Given our strong outlook for free cash flow growth in 2023 and beyond, we expect share repurchases to continue to remain our highest ROIC opportunity for capital allocation.

Source: https://seekingalpha.com/article/4575194-aon-plc-aon-q4-2022-earnings-call-transcript?source=feed_all_articles

However, if we compare the company's recent ROIC figures to its weighted average cost of capital or the WACC, we can see that the company is not creating value for investors since the WACC is about double the ROIC and that is not a good sign.

Source: https://seekingalpha.com/article/4640361-unifirst-margins-to-continue-to-suffer-but-it-is-too-expensive-to-buy-still?source=feed_all_articles

However, if we compare the company's recent ROIC figures to its weighted average cost of capital or the WACC, we can see that the company is not creating value for investors since the WACC is about double the ROIC and that is not a good sign.

Source: https://seekingalpha.com/article/4640361-unifirst-margins-to-continue-to-suffer-but-it-is-too-expensive-to-buy-still?source=feed_all_articles

Most importantly, the ROIC must outpace the cost of capital to create value for shareholders via economic profit.

Source: https://seekingalpha.com/article/4593952-neogen-capital-charge-to-drive-growth-a-new-headwind?source=feed_all_articles

On that front, the ROIC hurdle rate that you have of 20%, is that now largely being followed across all segments or does -- do certain segments like display get a pass, because they've already been grandfathered in?

Source: https://seekingalpha.com/article/4606819-corning-incorporated-glw-edward-schlesinger-presents-j-p-morgan-51st-annual-global-technology?source=feed_all_articles

Stock options and RSUs do not have special criteria, but the performance shares are tied to EPS growth (40%), ROIC (30%) and EBITDA margin (30%).

Source: https://seekingalpha.com/article/4607920-nordson-is-starting-to-look-interesting?source=feed_all_articles

The company with a higher ROIC is generating more value per dollar, which translates to more funding for growth, acquisitions, share buybacks, and/or dividends.

Source: https://www.forbes.com/sites/investor-hub/article/9-safe-high-yield-dividend-stocks-to-buy/

The firm's ROIC (18% in 2022) is also higher than my calculated WACC of 9.06%, which means the company is healthy and growing.

Source: https://seekingalpha.com/article/4631289-three-reasons-on-why-i-like-cdw-corporation?source=feed_all_articles

Visa's dominant market position has helped them maintain a high ROE (38%) and ROIC (24%) in the last 5 years.

Source: https://seekingalpha.com/article/4609241-visa-prospering-amid-economic-weakness?source=feed_all_articles

While criticism exists for Meta’s investment in the metaverse, which has yet to yield expected profits, it has lowered ROIC to 14%, still strong compared to many companies.

Source: https://investorplace.com/2023/09/meta-stock-outlook-3-catalysts-that-could-fuel-meta-platforms-next-rally/