ROIC screener Excel is the cleanest way to separate the businesses that compound capital from the businesses that destroy it. Return on Invested Capital tells you, in one number, how much profit a company earns per dollar of capital its owners and lenders have tied up in the business. When ROIC consistently sits above the cost of capital for years, free cash flow snowballs and intrinsic value compounds. When it dips below, growth actively destroys wealth. This guide gives you a downloadable Excel screener that ranks 25 mega-cap and large-cap names by ROIC, tiers them into quality buckets, and builds a sample allocation. It is tied to current June 2026 market conditions, which is exactly the right moment to stress-test capital efficiency.
Why ROIC Matters More in June 2026
Three things make Return on Invested Capital the metric of the moment.
First, the AI capex cycle has redefined how investors think about asset intensity. Hyperscalers and chipmakers are pouring tens of billions of dollars into compute infrastructure. Some of that spend earns high incremental returns; some does not. ROIC is the scorecard. A semi designer like NVDA can generate astronomical ROIC because the IP does the work. A power utility or data center REIT building physical capacity may run high ROE but middling ROIC after you account for the debt. Telling those apart with one ratio is enormously useful right now.
Second, the Fed is in the middle of a long pause and the path from here is uncertain. In any regime where multiples compress, the only thing that defends value is the underlying cash compounding rate of the business. Wide-moat compounders historically lose less in drawdowns and recover faster. ROIC sorts the wide-moat group from the rest.
Third, Q1 2026 earnings are essentially done and Q2 reports start in mid-July. The five-week window in June and early July is when fundamental investors refresh their watchlists and update screens with new annualized data. A ROIC screener built right now in Excel will reflect the freshest trailing twelve-month numbers when Q1 results flow through analyst models.
ROIC Quality Tier Table (Above-the-Fold Snapshot)
Below is the headline from the workbook. Twenty-five large-cap stocks, tiered by trailing ROIC as of June 8, 2026. Numbers are illustrative for the static sample; the template version uses live MarketXLS formulas.
| Tier | ROIC Range | Sample Names | Why They Make the Cut |
|---|---|---|---|
| Elite Compounder | 25 percent and above | NVDA, MA, LLY, AAPL, V, MCO, META, HD, GOOGL | Best-in-class capital allocation, durable moats, light reinvestment burden |
| High Quality | 15 to 25 percent | MSFT, ADBE, MCD, LMT, AVGO, COST, JNJ, ORCL, INTU, SPGI, JPM, KO, UNH, CHD | Wide moat franchises with adequate capital efficiency |
| Solid | 10 to 15 percent | BRK.B, MS, CRM | Stable returns near cost of capital; defensive but not compounders |
| Below Cost of Capital | Under 10 percent | None in this basket | Capital destroyers; avoid for long-term holds |
This is what the dashboard shows on first scroll. The full workbook adds scenarios, a portfolio allocation tool, sector averages, and a top-10 compounder watchlist with monitoring triggers.
What ROIC Actually Measures
Return on Invested Capital is calculated as Net Operating Profit After Tax divided by Invested Capital. Invested capital is shareholder equity plus long-term debt minus cash. The intuition is simple. If you handed a company one dollar of operating capital, how much after-tax operating profit did it generate from that dollar last year?
A few framing points that matter when you build the screener.
ROIC is not ROE. Return on Equity inflates when companies lever up the balance sheet. A buyback-heavy stock with negative book equity can post a ROE of 1000 percent that means nothing. ROIC sees through capital structure because it adds debt back to the denominator. That is why we use ROIC for quality screens and ROE only as a complementary check.
ROIC is not Return on Assets either. ROA penalizes asset-light businesses that legitimately do not need plant or inventory to operate. A software firm with tiny assets can post sky-high ROA without telling you whether the model is durable. ROIC normalizes by the capital actually deployed, including intangible-rich balance sheets, which gives a more honest read.
ROIC versus cost of capital is the only comparison that matters. A 12 percent ROIC sounds fine until you realize the company's weighted average cost of capital is 11.5 percent. That business is barely earning its keep. A 25 percent ROIC with a 9 percent cost of capital is a compounder. The 16-point spread is the engine of intrinsic value growth.
Quality Tier Framework
The workbook breaks the universe into four tiers. The tier cutoffs are intentional and they map to how professional investors think about quality.
Elite Compounder (ROIC 25 percent and above). These businesses earn far more than their cost of capital. They tend to share three traits: an asset-light or intangible-rich model, a durable competitive moat, and a long reinvestment runway. In the basket we screened, NVDA, MA, V, LLY, MCO, AAPL, GOOGL, META, and HD land in this tier. NVDA's ROIC is in a class of its own because the IP throws off enormous operating profit relative to the silicon and intangibles on the books. Mastercard and Visa illustrate the asset-light payments model, where every incremental transaction adds revenue but almost no incremental capital.
High Quality (15 to 25 percent ROIC). These are wide-moat businesses with adequate but not extraordinary capital efficiency. MSFT, ADBE, MCD, LMT, AVGO, ORCL, INTU, COST, KO, SPGI, JNJ, UNH, and JPM sit here. The distinguishing feature is durability. You probably will not get explosive return growth, but the business should keep earning above its cost of capital across cycles. For most portfolios, this tier is the backbone.
Solid (10 to 15 percent ROIC). These businesses earn roughly their cost of capital. They are not compounders, but they are stable. BRK.B is the canonical example. Berkshire's reported ROIC sits in the high single digits because the conglomerate carries a lot of capital on the balance sheet. The franchise is enormously durable; the compounding rate is moderate. Use this tier for ballast, not growth.
Below Cost of Capital (under 10 percent ROIC). Avoid these for long-term holds. Every dollar reinvested probably loses value. Cyclicals at the bottom of a cycle can land here temporarily, but a structural placement in this tier is a red flag. None of the names in this basket sit here, which is by design; the basket was screened for quality up front.
The Screening Approach
The workbook implements a simple three-filter screen on the Main Dashboard sheet.
The first input is a minimum ROIC threshold. The default is 20 percent, which captures the Elite and upper end of High Quality. Raise it to 25 percent for compounders only. Drop it to 15 percent for a broader quality universe.
The second input is a minimum market cap, defaulted to 100 billion dollars. This avoids small caps where reported ROIC can be noisy due to one-time items. You can lower it to 25 billion if you want to include mid-caps; the mid cap quality screener covers that segment in more depth.
The third input is an optional sector filter. The default is "All". You can restrict to a specific sector to compare within a peer group, which is useful because cross-sector ROIC comparisons can mislead. A 30 percent ROIC in software is normal; a 30 percent ROIC in capital-intensive industrials would be exceptional.
The Quality Score column blends ROIC and operating margin in a 60 to 40 weighting. Operating margin is the second-most reliable indicator of business quality because it captures pricing power and cost structure. Together they give a more rounded view than ROIC alone.
The Pass Filter column outputs YES or a dash based on whether each row clears all three input filters. Sort or filter this column to surface the names that match your criteria.
MarketXLS Implementation: The Real Formulas
The template version of the workbook uses the following MarketXLS functions to pull live data into every cell. All formulas have been verified against the MarketXLS function library.
=QM_Last("AAPL") Current price
=ReturnOnInvestedCapitalOneYear("AAPL") 1-year ROIC
=ReturnOnCapital("AAPL") Return on capital employed
=ReturnOnEquity("AAPL") Return on equity
=ReturnOnAssets("AAPL") Return on total assets
=OperatingMargin("AAPL") Operating margin percentage
=GrossMargin("AAPL") Gross margin percentage
=EBITDA("AAPL") EBITDA in millions
=EBITMargin("AAPL") EBIT margin
=Sector("AAPL") Sector classification
=Industry("AAPL") Industry classification
=MarketCapitalization("AAPL") Market capitalization
=RevenueGrowth("AAPL") Year-over-year revenue growth
=InterestCoverage("AAPL") Interest coverage ratio
=ForwardPE("AAPL") Forward P/E ratio
The most important formula in the entire workbook is ReturnOnInvestedCapitalOneYear. It pulls the trailing one-year ROIC as a percentage. Drop it into any cell with a ticker reference and the screener recalculates automatically. The template version uses cell references like =ReturnOnInvestedCapitalOneYear(B10) so you can change the ticker in column B and the entire row repopulates.
For deeper analysis there are several complementary functions. ReturnOnCapital (without the "OneYear" suffix) returns the trailing twelve months return on capital employed, which uses a slightly different denominator. ReturnOnCapitalLTM is the latest trailing twelve months variant. HF_NORMALIZED_RETURN_ON_INVESTED_CAPITAL uses normalized earnings to smooth one-time items. Pick the version that matches your model.
To get capital efficiency context, pair ROIC with operating margin via OperatingMargin, gross margin via GrossMargin, and revenue growth via RevenueGrowth. The combination tells you whether high ROIC is coming from pricing power (high gross margin), operating leverage (high operating margin), or growth (high revenue growth).
What Is Inside the Template
The template has six sheets, each designed to answer a specific question about a basket of quality stocks.
Sheet 1, How To Use. A walkthrough of every sheet, every input, and every formula. Read this first.
Sheet 2, Main Dashboard. The 25-stock screener. Yellow input cells at the top let you set minimum ROIC, minimum market cap, and an optional sector filter. The table below ranks every ticker by ROIC and computes a quality score and a pass/fail flag. Conditional formatting highlights the highest ROIC and quality scores with a color gradient.
Sheet 3, Scenario Analysis. Five macro scenarios (Base Case, Soft Landing, Sticky Inflation, Mild Recession, AI Capex Boom) and which quality tier tends to lead in each. Treat this as a regime checklist, not a forecast. It also contains the four-tier ROIC framework as a reference card.
Sheet 4, Compounder Watchlist. The top 10 ROIC names with a quality hypothesis and a monitoring trigger for each. The hypothesis is a one-line statement of why the business deserves a slot. The trigger is the single most important KPI to watch each quarter to confirm or refute the hypothesis. For example, the trigger for V is consumer spending data because payments volume is the engine; the trigger for MCO is corporate debt issuance because ratings revenue follows.
Sheet 5, Portfolio Allocation. Plug your portfolio size into the yellow cell and the template computes a ROIC-weighted allocation across the top 10 names. Stocks with higher ROIC get larger weights. The dollar allocations recalculate live when you change the portfolio size or the underlying ROIC values.
Sheet 6, Sector Comparison. Average ROIC, operating margin, revenue growth, and quality score by sector. A heatmap highlights which sectors lead and lag on each metric. Technology and Financial Services dominate the high-ROIC tiers in our basket; Healthcare and Consumer Defensive sit in the middle; Industrials and Communication Services are mixed.
Download the Templates
Download the templates:
- - Pre-filled with current illustrative values for June 8, 2026. Every cell shows the MarketXLS formula that powers it so you can switch on live data later.
- - Live-updating formulas wired into MarketXLS. Open it inside Excel with the MarketXLS add-in active and every cell repopulates automatically.
Both files are about 20 kilobytes. They open in Excel for Windows and Mac with the MarketXLS add-in. The static version works without the add-in if you want to see the layout first.
How to Use the ROIC Screener in Practice
Most users will follow one of three workflows.
Workflow A: Universe building. Start with the Main Dashboard. Lower the minimum ROIC to 15 percent and the minimum market cap to 50 billion dollars to get a broader universe. Sort by ROIC descending. Anything above 25 percent is the elite compounder candidate list. Anything between 15 and 25 percent is the high-quality watchlist. Save this as your quality universe and refresh quarterly.
Workflow B: Deep dive on a single name. Pick any ticker and drop it into the workbook. The template repopulates the row with live ROIC, ROE, ROA, operating margin, and quality score. Compare against the basket averages on the Sector Comparison sheet to see whether the name lands in the top tier within its peer group.
Workflow C: Build a quality basket. Use the Portfolio Allocation sheet. Set your portfolio size. The template weights the top 10 ROIC names by their ROIC and outputs dollar allocations. This is not a recommendation to buy; it is a starting point for thinking about position sizing. Most professional quality portfolios cap any single position at 10 percent and rebalance annually or when ROIC ranks change materially.
Quality Investing Caveats
A ROIC screener is a starting point, not a finished investment process. A few caveats.
ROIC is backward-looking. It uses the last twelve months of operating profit and the most recent balance sheet. Highly cyclical businesses can post sky-high ROIC at peak earnings and abysmal ROIC at trough. Use multi-year averages where possible. The ReturnOnInvestedCapitalQuarter and ReturnOnCapitalLTM functions provide alternative windows.
Goodwill can distort the denominator. Companies that have made large acquisitions carry significant goodwill on the balance sheet, which inflates invested capital and depresses ROIC. Some analysts adjust for this by using "tangible" invested capital. The HF_NORMALIZED_RETURN_ON_INVESTED_CAPITAL function handles some of this; you can also build your own adjustment using HF_TOTALASSETS, HF_TOTALEQUITY, and HF_LONG_TERM_DEBT.
High ROIC and overvaluation can coexist. A 40 percent ROIC company trading at 60 times earnings may still be a poor investment because the price already reflects the quality. Quality screens should always be paired with a valuation lens. Combine this workbook with a GARP screener or a Magic Formula screener to filter for quality at a reasonable price.
ROIC can change quickly when capital is deployed. A company entering a heavy capex cycle (think AI infrastructure right now) can see ROIC drop sharply for two or three years before the returns materialize. The drop is not necessarily bad. It depends on the incremental return on the new capital. Investors who screened out hyperscalers in 2023 because ROIC was falling missed the buildout. Always check the trajectory of revenue and operating profit alongside the ROIC level.
How This Pairs With Other MarketXLS Templates
ROIC screening sits in the broader quality stack alongside several other MarketXLS templates.
The wide moat stock screener maps the qualitative side: which moat type (network effects, switching costs, cost advantage, intangibles, efficient scale) underwrites the high ROIC. Use ROIC to quantify; use moat type to explain why.
The Magic Formula screener combines Return on Capital with Earnings Yield in the Joel Greenblatt formulation. ROIC alone tells you about quality; pairing it with earnings yield adds a value lens.
The free cash flow yield dashboard checks whether the high ROIC actually converts to free cash. A business can post strong ROIC on accounting earnings but fail to throw off real cash; FCF yield is the truth serum.
The mid-year portfolio rebalancing dashboard is where you integrate quality picks into the rest of your asset mix. Quality stocks are one sleeve of a complete portfolio.
FAQ: ROIC Screener Excel
What is a good ROIC for a stock? A useful rule of thumb: anything above 15 percent is high quality, anything above 25 percent is elite. The more important comparison is ROIC versus weighted average cost of capital. A 12 percent ROIC company with a 10 percent WACC creates value; the same 12 percent ROIC with a 14 percent WACC destroys it. The Elite Compounder tier in this template targets ROIC 25 percent and above because that buffer above any reasonable cost of capital is large enough to be durable.
How is ROIC calculated in MarketXLS Excel?
MarketXLS exposes =ReturnOnInvestedCapitalOneYear("TICKER") for the most common trailing one-year version, =ReturnOnCapital("TICKER") for the standard return on capital employed, and =ReturnOnCapitalLTM("TICKER") for the trailing twelve-month version. The function computes NOPAT divided by invested capital using the latest available filings. You do not need to build the formula manually; the function fetches the value directly.
ROIC versus ROE versus ROA: which one matters most for stock screening? ROIC is the most reliable single-number quality metric because it normalizes for capital structure. ROE inflates with leverage and is unreliable for screening across debt-heavy and debt-light companies. ROA penalizes asset-light businesses that legitimately do not need many assets. Use ROIC as the primary lens and the other two as confirmation. Our screener shows all three in adjacent columns so you can see the spread.
Can I use this ROIC screener for mid-cap or small-cap stocks? Yes. Drop the minimum market cap input from 100 billion dollars down to 5 billion or even 2 billion. Be aware that small-cap ROIC tends to be noisier because of one-time items, accounting conservatism, and earnings volatility. For mid caps specifically, the dedicated mid cap quality screener uses a different basket and slightly different thresholds.
How often should I refresh the ROIC screener? Quarterly is enough for most investors. ROIC moves slowly because it depends on annual operating profit and invested capital. Update right after each earnings season (January, April, July, October) and you will capture the freshest trailing twelve months data. If you are running an active strategy you can refresh monthly, but the marginal information is small.
Do I need MarketXLS to use the template? The static sample file works in any version of Excel without an add-in. The template version with live formulas requires the MarketXLS add-in installed inside Excel. The add-in handles the data fetch from QuoteMedia and the function library. Visit MarketXLS.com for setup or book a demo if you want a guided walkthrough.
The Bottom Line
A ROIC screener Excel template is the cleanest single way to find quality compounders. Return on Invested Capital is the metric that strips out capital structure noise and tells you whether a business actually earns more than the cost of the capital it employs. In June 2026, with the Fed in pause mode and the AI capex cycle in full swing, capital efficiency is the right lens.
Download the to see the layout, then grab the to plug in live data inside Excel. Pair it with the wide moat screener for qualitative context, the Magic Formula screener for valuation context, and the mid-year rebalancing dashboard to fit quality into your full portfolio.
Quality investing is about owning businesses that earn high returns on capital for long periods. ROIC is how you measure that, and Excel is where you do the work.
Visit MarketXLS.com to explore the function library or book a demo to see the platform live.
Educational only. Not investment advice. Past returns on capital do not guarantee future business performance. Always do your own due diligence.
