Companies that consistently
earn high returns on invested capital with high probabilities of continuing this into the future are worth far more than their carrying value.
When that activity returns, NOV is highly likely to capture its share, and again
earn a high return on invested capital.
Not exact matches
We saw that companies that
earned a consistently
high return on invested capital (ROIC) were the only ones to survive unscathed.
Investors must trust the agents of
capital (i.e., executives) to focus
on earning the
highest return per dollar
invested, and thereby growing shareholder value.
As Figure 1 shows, the 30 companies with the most cash stashed overseas
earn a much
higher return on invested capital (ROIC) than the rest of the S&P 500.