CFBK’s ROIC of 5.13% is significantly lower than its WACC of 20.98%, indicating inefficient capital use.
Citizens Community Bancorp, Inc. (CZWI) and C&F Financial Corporation (CFFI) demonstrate more effective capital utilization compared to CFBK.
Citizens Holding Company (CIZN) excels with a ROIC of 56.73% and a WACC of 28.44%, showcasing superior capital efficiency.
CF Bankshares Inc. (NASDAQ:CFBK) is a financial institution that provides a range of banking services. The company operates in a competitive landscape alongside peers like Citizens Community Bancorp, Inc. (CZWI), Colony Bankcorp, Inc. (CBAN), Community West Bancshares (CWBC), Citizens Holding Company (CIZN), and C&F Financial Corporation (CFFI). These companies are part of the banking sector, which is known for its focus on capital efficiency and return generation.
In evaluating CF Bankshares, the Return on Invested Capital (ROIC) is a key metric. CFBK’s ROIC is 5.13%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 20.98%. This indicates that the company is not generating sufficient returns to cover its cost of capital, which is a concern for investors looking for efficient capital use.
Comparatively, Citizens Community Bancorp, Inc. (CZWI) has a ROIC of 6.02% and a WACC of 13.43%, resulting in a ROIC to WACC ratio of 0.45. This suggests that CZWI is more effective in generating returns relative to its cost of capital than CFBK. Similarly, Colony Bankcorp, Inc. (CBAN) shows a ROIC of 5.57% against a WACC of 11.15%, with a ratio of 0.50, indicating better capital efficiency than CFBK.
Community West Bancshares (CWBC) has a lower ROIC of 2.84% but also a lower WACC of 8.71%, leading to a ROIC to WACC ratio of 0.33. Although CWBC’s returns are modest, its cost of capital is also lower, making it more efficient than CFBK. On the other hand, Citizens Holding Company (CIZN) excels with a ROIC of 56.73% and a WACC of 28.44%, resulting in a remarkable ratio of 1.99, highlighting its superior capital utilization.
C&F Financial Corporation (CFFI) also demonstrates effective capital use with a ROIC of 10.90% and a WACC of 10.08%, achieving a ratio of 1.08. This indicates that CFFI is generating returns that exceed its cost of capital, unlike CFBK. Overall, CFBK’s performance in terms of ROIC to WACC ratio is less favorable compared to its peers, particularly when contrasted with the standout performance of CIZN.