10 High-ROIC Compounders With Minimal Capex Needs

Companies that consistently generate high returns on invested capital tend to create long-term value, especially when they do so without heavy spending requirements. When a business compounds capital efficiently while keeping capex low, more cash can flow to shareholders or be reinvested in growth at attractive rates.

For investors, these types of companies offer a mix of durability, capital discipline and compounding potential that can compound returns over time with fewer balance sheet demands.

Here are 10 high-ROIC compounders with minimal capex needs that exemplify this combination of efficiency and long-term value creation.

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Here are 3 high- ROIC stocks from this list that analysts think could be the most undervalued today:

Adobe (ADBE)

Adobe (ADBE) is a leading software company best known for its Creative Cloud suite, which includes Photoshop, Illustrator, Premiere Pro, and Acrobat. The company has successfully transitioned to a subscription-based model, generating stable recurring revenue from creative professionals, enterprises, and digital marketers.

Over the last five fiscal years (FY2020-FY2024), Adobe has recorded average annual revenue growth of approximately 14%, although the more recent growth rates have moderated to around 11%, supported by strong demand for content creation, digital document management, and marketing analytics solutions. Its 3-year average return on equity (ROE) is approximately 35%, highlighting significant profitability and efficient use of capital.

Adobe does not issue dividends, instead allocating cash toward research and development, acquisitions, and stock repurchases. With leading market positions in digital media and digital experience software, the company continues to benefit from the growing need for content creation and digital transformation, particularly with its focus on AI-driven solutions.

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Copart (CPRT)

Copart (CPRT) is a global leader in online vehicle auctions and remarketing services, specializing in the resale and salvage of vehicles from primary sellers like insurance companies, financial institutions, and fleet operators. The company operates its proprietary VB3 (Virtual Bidding Third Generation) online auction platform and a large network of storage facilities across the United States and over a dozen international markets.

Over the last five years (FY2020-FY2025), Copart has delivered average annual revenue growth of over 16%, supported by increasing total-loss vehicle volumes and successful international expansion. Its recent 3-year average return on equity (ROE) is approximately 20.7%, reflecting strong profitability and efficient asset utilization.

Copart does not pay a dividend, instead strategically reinvesting its substantial cash flow into land acquisition, technology enhancements, and global capacity expansion. Its highly scalable digital model and dominant market position continue to provide a significant competitive advantage in the vehicle remarketing industry.

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Domino’s Pizza (DPZ)

Domino’s Pizza (DPZ) is one of the world’s largest pizza delivery and carryout chains, operating through a mix of company-owned and franchised stores across more than 90 countries. The business emphasizes digital ordering, efficient delivery logistics, and a streamlined menu to drive customer loyalty and franchisee profitability.

Over the past five years, Domino’s has generated average annual revenue growth of approximately 8.6% per year, driven by strong same-store sales and global store expansion. Its return on equity (ROE) is structurally negative due to the impact of aggressive share repurchases, which have resulted in a deficit in shareholders’ equity.

Despite this accounting effect, the company maintains strong profitability, as evidenced by a high Return on Assets (≈30−31%) and Return on Invested Capital (≈44−45%). The company maintains a dividend payout ratio of approximately 36-39% and offers a dividend yield of approximately 1.6-1.7%. With a capital-light franchise model, strong brand recognition, and continued investment in technology, Domino’s remains a leading player in the global quick-service restaurant market.

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Wall Street Analysts Are Bullish on These 5 Undervalued Compounders With Market-Beating Potential

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• Strong revenue growth and durable competitive advantages
• Attractive valuations based on forward earnings and expected earnings growth
• Long-term upside potential backed by analyst forecasts and TIKR’s valuation models

These are the kinds of stocks that can deliver massive long-term returns, especially if you catch them while they’re still trading at a discount.

Whether you’re a long-term investor or just looking for great businesses trading below fair value, this report will help you zero in on high-upside opportunities.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!