Pure Cycle Corporation (NASDAQ
CYO) is a company involved in water and land resource development. It focuses on providing water and wastewater services, as well as land development. In the competitive landscape, Pure Cycle is compared with companies like Cadiz Inc., Artesian Resources Corporation, Global Water Resources, Inc., Parke Bancorp, Inc., and Peoples Bancorp of North Carolina, Inc. These companies operate in similar sectors, providing a basis for financial performance comparison.
Pure Cycle's ROIC of 6.42% is lower than its WACC of 8.61%, resulting in a ROIC to WACC ratio of 0.75. This indicates that Pure Cycle is not generating returns that exceed its cost of capital. Despite this, it performs better than most of its peers in terms of this metric. For instance, Cadiz Inc. has a negative ROIC of -21.18%, which is significantly below its WACC of 8.47%, leading to a ROIC to WACC ratio of -2.50.
Artesian Resources Corporation, with a ROIC of 3.16% and a WACC of 4.73%, has the highest ROIC to WACC ratio among the peers at 0.67. This suggests that while Artesian's returns do not exceed its cost of capital, it is relatively more efficient compared to others. Global Water Resources, Inc. and Parke Bancorp, Inc. also have ROICs lower than their WACCs, with ratios of 0.25 and 0.17, respectively, indicating inefficiency in generating returns over their cost of capital.
Peoples Bancorp of North Carolina, Inc. has the lowest ROIC to WACC ratio of 0.14 among the peers, with a ROIC of 1.97% and a WACC of 13.96%. This highlights its inefficiency in generating returns over its cost of capital. Despite Pure Cycle's ROIC to WACC ratio of 0.75 being higher than most peers, it still falls short of generating returns above its cost of capital, indicating room for improvement in its financial performance.
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