For Immediate Release
Chicago, IL – October 1, 2020 – Stocks in this week’s article are CDW Corporation (
CDW Quick Quote CDW - Free Report) , Best Buy Co., Inc. ( BBY Quick Quote BBY - Free Report) , Applied Materials, Inc. ( AMAT Quick Quote AMAT - Free Report) , NRG Energy, Inc. ( NRG Quick Quote NRG - Free Report) and KLA Corporation ( KLAC Quick Quote KLAC - Free Report) . Top ROE Stocks to Buy as Markets Appear Edgy Before Polls
The U.S. equity markets continued to be under pressure due to no significant developments on the COVID-19 vaccine front and lack of consensus on an additional stimulus package from the government. Intense volatility became the norm of the season as markets appeared to have a rebalancing action. The first Presidential debate between the two candidates from the bipartisan parties further sparked a downtrend as markets appeared edgy and awaited signs of a potential winner.
As investors employ a wait-and-see approach in a classic example of “backing and filling” in the market, they can benefit from ‘cash cow’ stocks that garner higher returns. However, identifying cash-rich stocks alone does not make for a solid investment proposition unless it is backed by attractive efficiency ratios like return on equity (ROE). A high ROE ensures that the company is reinvesting cash at a high rate of return.
ROE = Net Income/Shareholders’ Equity
ROE helps investors distinguish profit-generating companies from profit burners and is useful in determining the financial health of a company. In other words, this financial metric enables investors to identify stocks that diligently deploy cash for higher returns.
Moreover, ROE is often used to compare the profitability of a company with other firms in the industry — the higher, the better. It measures how well a company is multiplying its profits without investing new equity capital and portrays management’s efficiency in rewarding shareholders with attractive risk-adjusted returns.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1069222/top-5-roe-stocks-to-buy-as-markets-appear-edgy-before-polls 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. About Screen of the Week
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