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A declining ROIC (Return on Invested Capital) for the Utilities sector could imply several things. It could indicate that the sector is not generating sufficient returns on its invested capital, which could be a result of various factors such as increased competition, regulatory changes, or operational inefficiencies. This could potentially make the sector less attractive to investors, as it may suggest that the companies within the sector are not using their capital effectively to generate profits. It could also impact the companies' ability to invest in new projects or to maintain their existing infrastructure. However, it's important to note that a declining ROIC is not necessarily a negative sign, as it could also be a result of the sector investing in long-term projects that have yet to yield returns.
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Need help with which companies or projects to invest in? As a key driver of value in business, ROIC measures how well the company deploys its capital....
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The ROIC for the Basic materials sector has been in a long-term decline since 2011 and fell 54 basis points since the end of 2019. The ROIC for the Consumer cyclicals sector was hit hard by the COVID-19 pandemic and has fallen to its lowest level since mid-2011. The ROIC for the Energy sector was hit hardest of all sectors during the COVID-19 pandemic that coincided with increased production from Saudi Arabia and Russia. The ROIC for the Financials sector declined 82 basis points since the end of 2019 but remains well above the lows of the Financial Crisis. The ROIC for the Healthcare sector declined just 14 basis points since the end of 2019 and have remained relatively stable since the end of 2016. The ROIC for the Industrials sector was the second hardest-hit this year and fell 217 basis points since the end of 2019 as the sector bore much of the brunt of the global shutdowns. The ROIC for the Utilities sector declined 27 basis points since the end of 2019 and is once again below...
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