PLP) demonstrates strong capital efficiency with a ROIC of 38.51% against a WACC of 13.62%, resulting in a ratio of 2.83.Steel Partners Holdings L.P. (NYSEPLP) is a diversified global holding company that engages in multiple business segments, including industrial products, energy, and financial services. The company aims to create value through strategic acquisitions and operational improvements. In the competitive landscape, SPLP is compared with peers like Tiptree Inc. (TIPT), Perma-Pipe International Holdings, Inc. (PPIH), and others to assess its financial performance.
A key metric in evaluating SPLP's performance is the Return on Invested Capital (ROIC) compared to the Weighted Average Cost of Capital (WACC). SPLP boasts a ROIC of 38.51% against a WACC of 13.62%, resulting in a ROIC to WACC ratio of 2.83. This indicates that SPLP is generating returns well above its cost of capital, showcasing effective capital management.
In comparison, Tiptree Inc. (TIPT) leads the peer group with a ROIC to WACC ratio of 4.28, derived from a ROIC of 33.24% and a WACC of 7.77%. This suggests that TIPT is utilizing its capital more efficiently than SPLP, potentially offering higher growth prospects. Despite this, SPLP's ratio still reflects strong capital efficiency.
Perma-Pipe International Holdings, Inc. (PPIH) also demonstrates effective capital utilization with a ROIC to WACC ratio of 3.56, based on a ROIC of 20.41% and a WACC of 5.74%. This places PPIH in a favorable position relative to SPLP, although SPLP's higher ROIC indicates stronger return generation.
Other peers like Thermon Group Holdings, Inc. (THR) and Townsquare Media, Inc. (TSQ) have lower ROIC to WACC ratios of 1.06 and 1.62, respectively. This suggests that these companies are generating returns closer to their cost of capital, indicating less efficient capital use compared to SPLP.
