SITE WACC - Weighted Average Cost of Capital
The WACC of SiteOne Landscape Supply Inc (SITE) is 9.9%.
| Range | Selected | |
| Cost of equity | 9.3% - 11.6% | 10.45% |
| Tax rate | 20.6% - 21.9% | 21.25% |
| Cost of debt | 4.9% - 5.8% | 5.35% |
| WACC | 8.8% - 11.0% | 9.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.17 | 1.2 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 11.6% |
| Tax rate | 20.6% | 21.9% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 4.9% | 5.8% |
| After-tax WACC | 8.8% | 11.0% |
| Selected WACC | 9.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SITE | SiteOne Landscape Supply Inc | 0.09 | 1.24 | 1.16 |
| AIT | Applied Industrial Technologies Inc | 0.06 | 1.25 | 1.19 |
| DNOW | NOW Inc | 0.02 | 1.35 | 1.33 |
| DXPE | DXP Enterprises Inc | 0.45 | 1.82 | 1.35 |
| FTT.TO | Finning International Inc | 0.32 | 1.62 | 1.3 |
| GMS | GMS Inc | 0.3 | 0.8 | 0.65 |
| MRC | MRC Global Inc | 0.36 | 1.55 | 1.21 |
| MSM | MSC Industrial Direct Co Inc | 0.1 | 1 | 0.93 |
| RUS.TO | Russel Metals Inc | 0.08 | 1.29 | 1.22 |
| TIH.TO | Toromont Industries Ltd | 0.07 | 0.51 | 0.48 |
| Low | High | |
| Unlevered beta | 1.18 | 1.21 |
| Relevered beta | 1.25 | 1.3 |
| Adjusted relevered beta | 1.17 | 1.2 |
SITE's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for SITE:
cost_of_equity (10.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.17) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.