DigitalBridge Group, Inc. (NYSE:DBRG) is a global digital infrastructure investment firm, focusing on investing in and operating businesses across the digital ecosystem, including data centers, cell towers, and fiber networks. The company competes with other firms in the digital infrastructure space, such as BrightSpire Capital, Inc. (BRSP) and Zurn Elkay Water Solutions Corporation (ZWS).
In analyzing DBRG's financial performance, the Return on Invested Capital (ROIC) is 9.30%, while the Weighted Average Cost of Capital (WACC) is 10.97%. This results in a ROIC to WACC ratio of 0.85. This indicates that DBRG is not generating returns that exceed its cost of capital, suggesting inefficiencies in capital utilization.
Comparatively, BrightSpire Capital, Inc. (BRSP) demonstrates a strong capital efficiency with a ROIC of 26.94% and a WACC of 5.17%. The ROIC to WACC ratio of 5.21 highlights BRSP's ability to generate returns well above its cost of capital, indicating effective value creation.
Zurn Elkay Water Solutions Corporation (ZWS) also shows effective capital utilization with a ROIC of 8.93% and a WACC of 7.45%. The ROIC to WACC ratio of 1.20 suggests that ZWS is generating returns that exceed its cost of capital, albeit not as significantly as BRSP.
In contrast, Alignment Healthcare, Inc. (ALHC) and Hayward Holdings, Inc. (HAYW) face challenges similar to DBRG. ALHC has a ROIC of 0.60% against a WACC of 9.03%, resulting in a low ROIC to WACC ratio of 0.07. HAYW's ROIC of 6.59% and WACC of 8.23% lead to a ratio of 0.80, indicating less efficient capital use.
