Booz Allen Hamilton Holding Corporation (NYSE:BAH) is a management and information technology consulting firm, primarily serving the U.S. government in defense, intelligence, and civil markets. It competes with firms such as Leidos Holdings, CACI International, and Science Applications International Corporation, offering similar consulting and technology services to government and commercial clients.
In evaluating Booz Allen Hamilton's financial performance, the Return on Invested Capital (ROIC) is a key metric. BAH's ROIC stands at 17.85%, which is significantly higher than its Weighted Average Cost of Capital (WACC) of 5.09%. This results in a ROIC to WACC ratio of 3.50, indicating that BAH is generating returns well above its cost of capital.
When comparing BAH to its peers, Leidos Holdings has a ROIC of 14.48% and a WACC of 6.37%, resulting in a ROIC to WACC ratio of 2.27. This shows that while Leidos is also generating returns above its cost of capital, it is not as efficient as BAH in doing so.
CACI International, another peer, has a ROIC of 8.62% and a WACC of 6.11%, leading to a ROIC to WACC ratio of 1.41. This suggests that CACI is generating returns above its cost of capital, but at a lower efficiency compared to BAH.
Science Applications International Corporation (SAIC) has a ROIC of 12.41% and a WACC of 5.24%, resulting in a ROIC to WACC ratio of 2.37. While SAIC is performing well, BAH's higher ratio indicates superior capital utilization.
