Franklin Covey Co. (NYSE:FC) is a global company specializing in performance improvement. It offers training and consulting services to help organizations and individuals achieve better results. The company operates in a competitive landscape with peers like CRA International, Inc. (CRAI), Thermon Group Holdings, Inc. (THR), Forrester Research, Inc. (FORR), Forestar Group Inc. (FOR), and Alamo Group Inc. (ALG).
Franklin Covey Co. exhibits a remarkable Return on Invested Capital (ROIC) of 50.62%, far exceeding its Weighted Average Cost of Capital (WACC) of 8.13%. This results in a ROIC to WACC ratio of 6.22, indicating that the company generates returns significantly above its cost of capital. This efficiency in capital utilization is a key strength for FC.
In comparison, CRA International, Inc. (CRAI) has a ROIC of 13.43% and a WACC of 7.86%, leading to a ROIC to WACC ratio of 1.71. While CRAI is the most efficient among FC's peers, its ratio is still much lower than FC's, highlighting FC's superior capital efficiency. This suggests that FC is more effective in generating returns from its investments.
Thermon Group Holdings, Inc. (THR) and Alamo Group Inc. (ALG) have ROIC to WACC ratios of 1.12 and 1.09, respectively. These figures indicate that while they generate returns above their cost of capital, their efficiency is modest compared to FC. This further underscores FC's strong financial performance and effective capital management.
Forrester Research, Inc. (FORR) and Forestar Group Inc. (FOR) show negative and low ROIC to WACC ratios of -5.68 and 0.77, respectively. These figures suggest challenges in generating returns above their cost of capital. In contrast, FC's high ratio of 6.22 positions it as a leader in capital efficiency, making it a potentially attractive investment opportunity.
