The lowest ROIC recorded over five years. A company with a high minimum ROIC (above 10%) maintains strong returns even in bad years, indicating a genuinely strong business with a durable competitive advantage.
Formula
Description
The lowest ROIC recorded over the past five years. A high minimum ROIC indicates the company maintains strong returns even during challenging periods. This is a better measure of moat durability than average ROIC, which can be inflated by one exceptional year.
Interpretation
Above 10% minimum ROIC over five years indicates a genuinely strong business. Below the cost of capital (typically 8-10%) even once suggests the moat may have weaknesses. Compare the gap between minimum and maximum ROIC to assess cyclicality.
Related Risk Indicators
Whether gross margins are improving or declining over five years. A positive trend means the company is gaining pricing power or reducing costs. Negative trends in a mature business are a warning sign.
Whether bottom-line profitability is improving or declining over five years. A positive trend indicates the business is becoming more profitable. The most durable improvement comes from expanding gross margins rather than cost-cutting.
Measures the accrual component of earnings relative to total assets. When cash flow exceeds reported earnings, the company has high-quality earnings. Large accruals relative to assets are a red flag for potential manipulation.
How many years in a row the company has grown revenue. Above 5 is strong, above 10 is exceptional. Long streaks indicate consistent demand and management execution. A break in a long streak deserves careful investigation.
Explore More
Learn
Investing Tools
- Stock ScreenerScreen 85,000+ stocks by 120 indicators
- VM Score LeaderboardTop stocks ranked daily by VMCI
- Guru StrategiesApply Buffett, Graham, Greenblatt strategies
- DCF CalculatorCalculate intrinsic value, free
- Global MarketsMacro overview across 73 exchanges
- Stock CompareSide-by-side company comparison
Browse Stocks
- Stock Analysis HubBrowse by sector, exchange, or country
- Technology StocksTop tech stocks by intrinsic value
- Healthcare StocksTop healthcare stocks by VMCI
- Financial StocksTop financial stocks by VMCI
- Energy StocksTop energy stocks by fundamentals
- Real Estate StocksTop REIT and property stocks
- NYSE StocksBest-valued stocks on NYSE
- NASDAQ StocksTop NASDAQ stocks by VM Score
- LSE StocksTop London Stock Exchange stocks
- US StocksBest US stocks by fundamentals
- UK StocksBest UK stocks by fundamentals
- Japan StocksTop Japanese stocks by value