- BankFinancial Corporation (NASDAQ:BFIN) has a ROIC of 1.96% and a WACC of 5.33%, indicating inefficient capital utilization.
- ESSA Bancorp shows better capital efficiency with a ROIC of 16.19% and a WACC of 10.28%.
- Ames National Corporation stands out with a ROIC of 56.88% and a WACC of 19.61%, suggesting highly efficient capital utilization.
BankFinancial Corporation (NASDAQ:BFIN) is a financial institution that provides a range of banking services. The company operates in a competitive landscape with peers such as ESSA Bancorp, Sierra Bancorp, BCB Bancorp, Bank of Marin Bancorp, and Ames National Corporation. These companies are evaluated based on their Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) to assess their capital efficiency.
BankFinancial Corporation’s ROIC is 1.96%, which is significantly lower than its WACC of 5.33%. This results in a ROIC to WACC ratio of 0.37, indicating that BFIN is not generating returns that exceed its cost of capital. This suggests that the company may need to improve its capital utilization to enhance shareholder value.
In comparison, ESSA Bancorp (ESSA) has a ROIC of 16.19% and a WACC of 10.28%, resulting in a ROIC to WACC ratio of 1.57. This indicates that ESSA is effectively using its capital to generate returns above its cost, showcasing better capital efficiency than BFIN. Similarly, Sierra Bancorp (BSRR) has a ROIC of 3.91% and a WACC of 12.29%, with a ROIC to WACC ratio of 0.32, which is slightly lower than BFIN’s ratio.
Ames National Corporation (ATLO) stands out with a ROIC of 56.88% and a WACC of 19.61%, resulting in a ROIC to WACC ratio of 2.90. This indicates that ATLO is generating returns significantly above its cost of capital, suggesting efficient capital utilization and strong growth potential compared to its peers. This highlights the importance of effective capital management in achieving superior financial performance.
