10 high ROIC Mid-Cap stocks for 2025
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Almost every investor seeks consistent returns through their investments. For those focused on long-term growth and capital efficiency, stocks with a high Return on Invested Capital (ROIC) often stand out. Companies with strong ROIC are better at turning investments into profits, which can translate into higher valuations and long-term returns for investors.
To help identify promising mid-cap stocks with high ROIC, we applied several key criteria:
- High ROIC: Companies with an ROIC between 10%-50%, indicate strong capital efficiency.
- CROIC (Cash Return on Invested Capital): Companies with a CROIC exceeding 10%
- Mid-Cap Range: Companies with a market capitalization between $2 billion and $10 billion, offering a balance of growth potential and stability.
The following 10 mid-cap stocks meet all these criteria. While past performance is no guarantee of future results, these companies have demonstrated the potential for reliable returns and financial stability, making them attractive options for growth-oriented investors in 2025.
10 high ROIC Mid-Cap stocks for 2025
- Expeditors International of Washington, Inc. (EXPD)
- Universal Display Corporation (OLED)
- Atmus Filtration Technologies Inc. (ATMU)
- Powell Industries, Inc. (POWL)
- Grand Canyon Education, Inc. (LOPE)
- Match Group, Inc. (MTCH)
- Halozyme Therapeutics, Inc. (HALO)
- Masco Corporation (MAS)
- Fabrinet (FN)
- IES Holdings, Inc. (IESC)
1/ Expeditors International of Washington, Inc. (EXPD)
EXPD operates in global logistics and freight services, significantly outperforming industry benchmarks with its efficient capital use.
- Market Cap: $18.53 billion
- ROIC: 36.40%
- CROIC: 31.80%
2/ Universal Display Corporation (OLED)
As a key player in OLED technology, Universal Display enjoys premium profit margins through proprietary technology in display and lighting industries.
- Market Cap: $9.98 billion
- ROIC: 35.31%
- CROIC: 39.24%
3/ Atmus Filtration Technologies Inc. (ATMU)
ATMU leads in innovative filtration solutions, supporting critical industries with high-efficiency products and a strong return on invested capital.
- Market Cap: $3.13 billion
- ROIC: 34.69%
- CROIC: 12.02%
4/ Powell Industries, Inc. (POWL)
Powell Industries specializes in the development and manufacturing of equipment for electrical energy distribution, showcasing robust financial performance.
- Market Cap: $2.66 billion
- ROIC: 32.95%
- CROIC: 23.98%
5/ Grand Canyon Education, Inc. (LOPE)
LOPE provides educational services, particularly in the online postsecondary education sector, achieving high ROIC figures through efficient operations.
- Market Cap: $4.15 billion
- ROIC: 32.34%
- CROIC: 35.80%
6/ Match Group, Inc. (MTCH)
MTCH operates a portfolio of online dating services, leveraging strong cash flow generation capabilities to sustain growth and shareholder returns.
- Market Cap: $10.00 billion
- ROIC: 32.27%
- CROIC: 29.47%
7/ Halozyme Therapeutics, Inc. (HALO)
HALO focuses on drug delivery technologies, enhancing the effectiveness of biologics with its enzyme-based platform, leading to high returns on capital.
- Market Cap: $7.28 billion
- ROIC: 29.92%
- CROIC: 30.17%
8/ Masco Corporation (MAS)
MAS is a global leader in the manufacture of home improvement and building products, demonstrating strong profitability and operational efficiency.
- Market Cap: $18.38 billion
- ROIC: 29.29%
- CROIC: 26.93%
9/ Fabrinet (FN)
FN provides precision optical, electro-mechanical, and electronic manufacturing services, focusing on complex components for global tech firms.
- Market Cap: $8.67 billion
- ROIC: 28.84%
- CROIC: 30.61%
10/ IES Holdings, Inc. (IESC)
IESC offers industrial infrastructure services across various sectors, maintaining high efficiency and profitability in its operations.
- Market Cap: $4.04 billion
- ROIC: 27.71%
- CROIC: 23.07%
For investors seeking opportunities, our analytics team provides comprehensive lists of undervalued companies where the intrinsic value suggests potential undervaluation, combining fundamental analysis with quality metrics:
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1. What is considered a high ROIC?
A high ROIC (Return on Invested Capital) is typically considered to be above 15%. This means that for every dollar invested in the company, it generates at least 15 cents in profit. Companies with a high ROIC demonstrate strong capital efficiency, superior operational performance, and the ability to generate attractive returns for shareholders. For example, Company A maintains an ROIC of 18%, significantly outperforming its industry peers.
2. What defines a mid-cap stock?
A mid-cap stock is a company with a market capitalization ranging from $2 billion to $10 billion. These companies are often in the growth phase, offering a balance of stability and growth potential. Unlike small-cap stocks, mid-caps typically have more established operations and revenue streams, while still possessing ample room for growth compared to large-cap stocks like Apple or Microsoft. For example, Company B is a mid-cap stock with a market cap of $6.5 billion, making it an attractive option for growth-oriented investors.
3. Why is ROIC important when choosing stocks?
ROIC is a crucial metric because it measures how efficiently a company turns its investments into profits. Companies with a high ROIC are better equipped to generate value for shareholders. It also reflects the company's ability to reinvest in growth initiatives. A consistently high ROIC can signal strong competitive advantages or "moats" that protect a company's profitability. For example, Company C has maintained an ROIC of 20% for the past five years, indicating a sustainable competitive edge in its market.
4. How can investors identify high ROIC mid-cap stocks?
To identify high ROIC mid-cap stocks, investors should focus on companies that meet the following criteria:
- ROIC above 15%: Companies consistently achieving this level demonstrate strong operational efficiency.
- Market cap between $2 billion and $10 billion: Ensures the company qualifies as a mid-cap stock.
- Earnings consistency: Look for companies with a track record of steady earnings growth.
- Competitive advantage (moat): Companies with unique market positions or strong brand power tend to maintain high ROIC.
For example, screening tools like Finbox, Morningstar, or online brokerage platforms allow investors to filter stocks based on these metrics. Company D, with an ROIC of 17% and a market cap of $8.2 billion, is a prime example of a high-ROIC mid-cap stock.
5. Are high ROIC stocks always a good investment?
Not necessarily. While a high ROIC indicates strong profitability, it’s essential to analyze other financial metrics such as revenue growth, debt levels, and market conditions. Sometimes, companies with unsustainable business models may temporarily report a high ROIC, but their long-term prospects may be uncertain. Additionally, high ROIC alone doesn't guarantee share price appreciation. Investors should consider the broader financial picture. For instance, Company E has an impressive ROIC of 22%, but its declining revenue growth raises concerns about its future potential.
