Axos Financial, Inc. (NYSE:AX) is a financial services company that provides a range of banking products and services. It operates primarily through its digital banking platform, offering personal and business banking solutions. Axos competes with other financial institutions like Ameris Bancorp, Cadence Bank, BankUnited, and Pacific Premier Bancorp, among others.
In evaluating Axos Financial's performance, the Return on Invested Capital (ROIC) is a key metric. Axos boasts a ROIC of 27.10%, which is significantly higher than its Weighted Average Cost of Capital (WACC) of 20.74%. This indicates that Axos is generating returns well above its cost of capital, a positive indicator for investors.
Comparatively, Ameris Bancorp has a ROIC of 0.64% against a WACC of 14.57%, resulting in a ROIC to WACC ratio of 0.04. This suggests that Ameris is not generating sufficient returns relative to its cost of capital, unlike Axos, which has a ratio of 1.31.
Cadence Bank and BankUnited also show lower efficiency in capital utilization. Cadence Bank's ROIC is 0.51% with a WACC of 11.31%, and BankUnited's ROIC is 2.15% with a WACC of 12.51%. Their ROIC to WACC ratios are 0.05 and 0.17, respectively, indicating less effective capital use compared to Axos.
Pacific Premier Bancorp, with a ROIC of 8.73% and a WACC of 13.55%, has the highest ROIC to WACC ratio among Axos's peers at 0.64. However, Axos's ratio of 1.31 still surpasses this, highlighting its superior capital efficiency. This makes Axos Financial an attractive option for investors seeking companies with strong capital utilization.
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