ROE Kings: Maximizing The Return On Your Equity

A lot of time is spent looking for stocks that are “cheap,” but don’t you want to invest in a company that can efficiently earn returns on the capital you provide them? Just because a company is priced low doesn’t mean its a great buy. However, a company that can put investors money to good use is usually a keeper in your portfolio.

With this in mind, we screened for Large Cap Stocks that offered superior returns on equity of over 50%. ROE is a measure of how much profit a company generates on the capital provided by shareholders.

Business Section: Investing Ideas

Our screen produced the results below. We compare each companies ROE to the ROE of their peers:

1. Colgate-Palmolive Co. ( CL): Together with its subsidiaries, manufactures and markets consumer products worldwide. Market cap at $50.68B, most recent closing price at $107.26. ROE = 95.25% vs. Peers = 27.88%

2. Coach, Inc. ( COH): Engages in the design and marketing of accessories and gifts for men and women in the United States and internationally. Market cap at $16.72B, most recent closing price at $58.92. ROE = 54.86% vs. Peers = 26.27%

3. Ford Motor Co. ( F): Develops, manufactures, distributes, and services vehicles and parts worldwide. Market cap at $43.67B, most recent closing price at $11.67. ROE = 142.46% vs. Peers = 11.73%

4. Hershey Co. ( HSY): Engages in manufacturing, marketing, selling, and distributing various chocolate and confectionery products, pantry items, and gum and mint refreshment products worldwide. Market cap at $16.54B, most recent closing price at $74.10. ROE = 68.43% vs. Peers = 16.39%

5. Moody’s Corp. ( MCO): Provides credit ratings and related research, data, and analytical tools; risk management software; and quantitative credit risk measures, credit portfolio management solutions, and training services in the United States, Europe, the Middle East, and Africa. Market cap at $11.32B, most recent closing price at $50.79. ROE = 982.29% vs. Peers = 43.43%

6. The TJX Companies, Inc. ( TJX): Operates as an off-price apparel and home fashions retailer in the United States and internationally. Market cap at $31.85B, most recent closing price at $43.68. ROE = 53.45% vs. Peers = 22.70%

 

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