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Zacks.com featured highlights include: CDW Corp, Celanese Corp, AGNC Investment, KLA Corp and D.R. Horton

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For Immediate Release

Chicago, IL – January 27, 2021 – Stocks in this week’s article are CDW Corporation (CDW - Free Report) , Celanese Corporation (CE - Free Report) , AGNC Investment Corp. (AGNC - Free Report) , KLA Corporation (KLAC - Free Report) and D.R. Horton, Inc. (DHI - Free Report) .

5 ROE Picks as Markets Brace for Earnings Season Volatility

The U.S. equity markets witnessed intense volatility in the past week with falling oil prices and below par quarterly performance from leading blue-chip technology stocks weighing on the indices.

To add to the woes, the death toll from the coronavirus outbreak continues to mount, forcing President Joe Biden to acknowledge that the country is facing an uphill task to economic recovery as fatalities are likely to increase further over the next few weeks. However, the slump was somewhat pared by solid U.S. manufacturing activity data, which surged to its highest level in more than 13.5 years in early January.    

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: A Key Metric

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 companies 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/1251879/5-roe-picks-as-markets-brace-for-earnings-season-volatility

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Strong Stocks that Should Be in the News

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