Back to top

Image: Bigstock

Boost Your Portfolio for July and Beyond with this ROE Stock Screener

Read MoreHide Full Article

The stock market ended the first half of 2021 on a high note as investors shrugged off inflation worries. The S&P 500 jumped to its seventh consecutive record last Friday, which marked its best such streak since 1997. And the Dow hit its first closing records since early May on July 2.

The Nasdaq also continued its impressive run that’s once again seen Wall Street dive into beaten-down technology names every chance it gets. The tech-heavy index touched another fresh high Tuesday, as investors look to the improving S&P 500 earnings picture and the growing U.S. economy.

The recent positivity follows June’s strong jobs data that gave bullish investors the best of both worlds. The U.S. added more jobs than projected, while unemployment inched up to 5.9% from 5.8%, as more people start looking for work. This means the Fed might not be forced to raise rates sooner than initially projected. In fact, the yield on the 10-year U.S. Treasury note has fallen from 1.75% in late March down to 1.35% to start the trading week.

Even when the central bank does start to raise its core rate, interest rates are poised to remain historically low, likely leaving the market to chase returns in stocks for the foreseeable future. Therefore, investors might want to buy stocks for the second half of 2021. And why not add highly-ranked stocks that have proven they can turn assets into profits…


Return on Equity or ROE helps investors understand if a firm’s executives are creating assets with investors’ cash or burning it. ROE shows a company’s ability to turn assets into profits. Put another way, this vital metric measures the profits made for each dollar of shareholder equity.

ROE is calculated as net income / shareholder's equity. For example: if $0.10 of assets are created for each $1 of shareholder equity that would equal a ROE of 10%.

Overall, Return on Equity is a great item to use regardless of what type of investor you are since it provides insight into management’s ability to create value and keep costs under control. Plus, if ROE slips, it can alert us to potential problems.

With all that said, let’s take a look at this screen’s parameters and see the companies proving they can return value to shareholders instead of churning through their cash…

• Zacks Rank equal to 1

The Zacks Rank looks at upward earnings estimate revisions, among other metrics, in order to find companies that are projected to see their earnings get stronger. In fact, beginning with a Zacks Rank #1 can be a great starting point because it boasts an average annual return of over 25% per year during the last 30 years.

• Price greater than or equal to 5

Today we ruled out any stocks that are trading for less than $5 a share because they can be more volatile and speculative.

• Price/Sales Ratio less than or equal to 1

On top of that, we are looking for a low price to sales ratio. Today we went with 1 or below as this range is usually thought to provide better value since investors pay less for each unit of sales.

• % (Broker) Rating Strong Buy equal to 100 (%)

In this screen, we decided to go with companies that brokers are fully on board with since ratings are typically skewed strongly toward ‘buy’ and ‘strong buy.’

• ROE greater than or equal to 10

Lastly, but most importantly for today’s screen, we got rid of any companies with Return on Equity of less than 10 because the median ROE value for all of the stocks in the Zacks Universe is under 10.

Here are the two stocks that made it through today’s screen…

A-Mark Precious Metals, Inc. (AMRK - Free Report)

Marubeni Corporation (MARUY - Free Report)

Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.

Click here to sign up for a free trial to the Research Wizard today.

Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at:

Zacks' Super Screen

It's hard to believe, even for us at Zacks. But from 2000-2020, while the market gained +6.6% per year, our top stock-picking strategy averaged +52.4% per year.

How has that screen done lately? From 2016-2020, it more than tripled the market's +103.9% gain with a soaring +381.1% return.

Free – See the Stocks It Turned Up for Today >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Marubeni Corp. (MARUY) - free report >>

AMark Precious Metals, Inc. (AMRK) - free report >>