Imperial Petroleum Generates 10.32% ROIC Versus 9.73% WACC
IMPP•Imperial Petroleum's ROIC reached 10.32%, exceeding its 9.73% WACC and yielding a ROIC to WACC ratio of 1.06, signaling economic value creation. Its peers Mullen Automotive and Hycroft Mining show ROIC to WACC ratios of 0.41 and -2.08 respectively, indicating value destruction relative to Imperial.
1. Capital Efficiency Exceeds Cost of Capital
Imperial Petroleum's return on invested capital (ROIC) stands at 10.32%, surpassing its weighted average cost of capital (WACC) of 9.73%, resulting in a ROIC to WACC ratio of 1.06. This spread indicates the company is generating returns above its cost of capital, confirming effective value creation.
2. Peer Benchmarking Highlights Unique Value Creation
Compared to peer companies, Imperial Petroleum is the only one with a ROIC to WACC ratio above 1. Mullen Automotive's ratio sits at 0.41 and Hycroft Mining's at -2.08, signaling value destruction for those firms and underscoring Imperial Petroleum's superior capital discipline.
3. Implications for Shareholders
The positive return spread suggests the company’s management is effectively allocating capital to profitable investments, supporting sustainable growth and enhanced shareholder value over the long term.
