We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks.com featured highlights The Interpublic Group of Companies, PepsiCo, Dillard's, Suzano and Triton International
Read MoreHide Full Article
For Immediate Release
Chicago, IL – September 15, 2022 – Stocks in this week’s article are The Interpublic Group of Companies, Inc. (IPG - Free Report) , PepsiCo, Inc. (PEP - Free Report) , Dillard's, Inc. (DDS - Free Report) , Suzano S.A. (SUZ - Free Report) and Triton International Limited .
5 Stocks with High ROE as Inflation Stokes Rate Hike Fears
The U.S. equity markets witnessed a sharp decline in the past few trading sessions that wiped off nearly all the recent rallies, as the August consumer price index report turned up with a higher-than-expected inflation reading. Despite a fall in gasoline prices, inflation rose 0.1% from July while core inflation was up 0.6% month over month.
On a year-over-year basis, inflation was up 8.3%. Economists had broadly expected an 8.1% increase with a 0.3% rise in core inflation. This apparently annulled broad-based expectations of monetary easing and fueled speculations that the Fed is likely to announce a 75-basis point hike in interest rates for the third consecutive time in its next policy meeting scheduled next week to rein in inflationary pressure.
Investors would await further clarity regarding the future interest rate path and its likely impact on the economy as concerns with regard to recession refuse to abate. The central bank had earlier offered a broad outline of its reduction in asset holdings for monetary tightening. The Fed had indicated that it intends to reduce Treasury holdings and mortgage-backed securities by $30 billion and $17.5 billion, respectively, from June and extend the tallies to $65 billion and $35 billion after three months.
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. The Interpublic Group of Companies, Inc., PepsiCo, Inc., Dillard's, Inc., Suzano S.A. and Triton International Limited are some of the stocks with high ROE to profit from.
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.
Here are five of the 11 stocks that qualified the screen:
The Interpublic Group of Companies, Inc.: New York-based Interpublic provides multi-channel advertising and communications and marketing services such as meeting and event production, public relations, sports and entertainment marketing, corporate and brand identity, and strategic marketing consulting to a broad list of customers in more than 100 countries. The company focuses on point-to-point client interaction, which enables accurate decision-making and enhanced customer focus.
Interpublic delivered a trailing four-quarter earnings surprise of 14.3%, on average and has a long-term earnings growth expectation of 1.2%. Currently, IPG has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
PepsiCo, Inc.: Headquartered in Purchase, NY, PepsiCo is one of the leading global food and beverage companies. Its complementary brands/businesses include Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. The company serves customers in more than 200 countries and territories.
The company has a long-term earnings growth expectation of 7.7% and delivered a trailing four-quarter earnings surprise of 3.8%, on average. Pepsi carries a Zacks Rank #2.
Dillard's, Inc.: Founded in 1938, Dillard's is a large departmental store chain featuring fashion apparel and home furnishings. Its merchandise mix consists of both branded and private-label items. The company’s strategy is to offer more fashion-forward and trendy products to attract customers.
Dillard’s is benefiting from continued momentum in consumer demand and better inventory management. The company delivered a trailing four-quarter earnings surprise of 215%, on average. DDS sports a Zacks Rank #1.
Suzano S.A.: Headquartered in Salvador, Brazil, Suzano produces and sells eucalyptus pulp and paper products. With over 90 years of experience, this vertically integrated firm is one of the largest producers of paper and graphic products in South America.
The company has a long-term earnings growth expectation of 10.5% and delivered a trailing four-quarter earnings surprise of 46.7%, on average. Suzano sports a Zacks Rank #1.
Triton International Ltd.: Based in Hamilton, Bermuda, Triton is the largest lessor of intermodal containers (large steel boxes that are used for transporting freight by ship/rail/truck). The company also focuses on leasing chassis, which are used for transporting containers.
The company has a long-term earnings growth expectation of 10% and delivered a trailing four-quarter earnings surprise of 7.5%, on average. TRTN carries a Zacks Rank #2.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
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
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks.com featured highlights The Interpublic Group of Companies, PepsiCo, Dillard's, Suzano and Triton International
For Immediate Release
Chicago, IL – September 15, 2022 – Stocks in this week’s article are The Interpublic Group of Companies, Inc. (IPG - Free Report) , PepsiCo, Inc. (PEP - Free Report) , Dillard's, Inc. (DDS - Free Report) , Suzano S.A. (SUZ - Free Report) and Triton International Limited .
5 Stocks with High ROE as Inflation Stokes Rate Hike Fears
The U.S. equity markets witnessed a sharp decline in the past few trading sessions that wiped off nearly all the recent rallies, as the August consumer price index report turned up with a higher-than-expected inflation reading. Despite a fall in gasoline prices, inflation rose 0.1% from July while core inflation was up 0.6% month over month.
On a year-over-year basis, inflation was up 8.3%. Economists had broadly expected an 8.1% increase with a 0.3% rise in core inflation. This apparently annulled broad-based expectations of monetary easing and fueled speculations that the Fed is likely to announce a 75-basis point hike in interest rates for the third consecutive time in its next policy meeting scheduled next week to rein in inflationary pressure.
Investors would await further clarity regarding the future interest rate path and its likely impact on the economy as concerns with regard to recession refuse to abate. The central bank had earlier offered a broad outline of its reduction in asset holdings for monetary tightening. The Fed had indicated that it intends to reduce Treasury holdings and mortgage-backed securities by $30 billion and $17.5 billion, respectively, from June and extend the tallies to $65 billion and $35 billion after three months.
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. The Interpublic Group of Companies, Inc., PepsiCo, Inc., Dillard's, Inc., Suzano S.A. and Triton International Limited are some of the stocks with high ROE to profit from.
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.
Here are five of the 11 stocks that qualified the screen:
The Interpublic Group of Companies, Inc.: New York-based Interpublic provides multi-channel advertising and communications and marketing services such as meeting and event production, public relations, sports and entertainment marketing, corporate and brand identity, and strategic marketing consulting to a broad list of customers in more than 100 countries. The company focuses on point-to-point client interaction, which enables accurate decision-making and enhanced customer focus.
Interpublic delivered a trailing four-quarter earnings surprise of 14.3%, on average and has a long-term earnings growth expectation of 1.2%. Currently, IPG has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
PepsiCo, Inc.: Headquartered in Purchase, NY, PepsiCo is one of the leading global food and beverage companies. Its complementary brands/businesses include Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. The company serves customers in more than 200 countries and territories.
The company has a long-term earnings growth expectation of 7.7% and delivered a trailing four-quarter earnings surprise of 3.8%, on average. Pepsi carries a Zacks Rank #2.
Dillard's, Inc.: Founded in 1938, Dillard's is a large departmental store chain featuring fashion apparel and home furnishings. Its merchandise mix consists of both branded and private-label items. The company’s strategy is to offer more fashion-forward and trendy products to attract customers.
Dillard’s is benefiting from continued momentum in consumer demand and better inventory management. The company delivered a trailing four-quarter earnings surprise of 215%, on average. DDS sports a Zacks Rank #1.
Suzano S.A.: Headquartered in Salvador, Brazil, Suzano produces and sells eucalyptus pulp and paper products. With over 90 years of experience, this vertically integrated firm is one of the largest producers of paper and graphic products in South America.
The company has a long-term earnings growth expectation of 10.5% and delivered a trailing four-quarter earnings surprise of 46.7%, on average. Suzano sports a Zacks Rank #1.
Triton International Ltd.: Based in Hamilton, Bermuda, Triton is the largest lessor of intermodal containers (large steel boxes that are used for transporting freight by ship/rail/truck). The company also focuses on leasing chassis, which are used for transporting containers.
The company has a long-term earnings growth expectation of 10% and delivered a trailing four-quarter earnings surprise of 7.5%, on average. TRTN carries a Zacks Rank #2.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1980312/5-stocks-with-high-roe-as-inflation-stokes-rate-hike-fears
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
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.