For Immediate Release
Chicago, IL – July 22, 2021 – Stocks in this week’s article are Best Buy Co., Inc. (
BBY Quick Quote BBY - Free Report) , KLA Corporation ( KLAC Quick Quote KLAC - Free Report) , Polaris Inc. ( PII Quick Quote PII - Free Report) , CDW Corporation ( CDW Quick Quote CDW - Free Report) and 3M Company ( MMM Quick Quote MMM - Free Report) . 5 High ROE Stocks as Markets Spurn Covid Resurgence
The U.S. equity markets shrugged off resurgent coronavirus fears from the Delta variant and protracted economic recovery owing to mounting inflationary pressures with a string of upbeat earnings from blue-chip companies. The uptick in infections and imposition of fresh restrictions in several parts of Asia and Europe threatened to derail the global economic revival, spooking the 10-year U.S. Treasury yields.
However, better-than-expected earnings performance from hitherto reported companies appeared to soothe investor nerves and spurred optimism about economic revival. This, in turn, triggered an amazing turnaround for the benchmark U.S. Treasury yield and put the markets back on the growth track.
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 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/1765043/5-high-roe-stocks-as-markets-spurn-fears-of-virus-resurgence 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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Strong Stocks that Should Be in the News
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