Hagerty, Inc. (NYSE:HGTY) is a company that specializes in providing insurance for classic cars and other collectible vehicles. It offers a range of services including insurance products, valuation tools, and automotive events. Hagerty is known for its focus on the niche market of classic car enthusiasts, setting it apart from traditional insurance companies.
In evaluating Hagerty's financial performance, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are key metrics. Hagerty's ROIC of 10.54% compared to its WACC of 7.06% results in a ROIC to WACC ratio of 1.49. This indicates that Hagerty is generating returns significantly above its cost of capital, showcasing effective capital utilization.
When comparing Hagerty to its peers, the company's capital efficiency becomes even more apparent. For instance, CCC Intelligent Solutions Holdings Inc. (CCCS) has a ROIC of 0.89% and a WACC of 7.15%, resulting in a ROIC to WACC ratio of 0.12. This suggests that CCCS is not generating returns above its cost of capital, unlike Hagerty.
Similarly, Bowlero Corp. (BOWL) and Clearwater Analytics Holdings, Inc. (CWAN) both have negative ROIC to WACC ratios of -0.04, indicating inefficiencies in capital utilization. In contrast, Hagerty's positive ratio highlights its superior ability to generate returns on its invested capital.
Ermenegildo Zegna N.V. (ZGN) shows a ROIC to WACC ratio of 0.90, which is the highest among Hagerty's peers but still falls short of Hagerty's 1.49. This further emphasizes Hagerty's strong position in terms of capital efficiency, making it a potentially attractive investment compared to its peers.
