For Immediate Release
Chicago, IL – April 29, 2020 – Stocks in this week’s article are Kinross Gold Corp. KGC, Stora Enso Oyj SEOAY and The Progressive Corporation PGR.
Top 3 ROE Stocks to Buy as Markets Seek Return to Normalcy
As various states prepare to ease the lockdown restrictions and seek to resume normalcy with President Trump proclaiming that the country has passed the ‘coronavirus peak’, equity markets appear to be taking a turn for the better. Investors are pinning hopes on possibilities of consumer resilience in the domestic market with the economies reopening soon.
With one of the worst declines in the financial markets in the recent memory being probably behind us, the markets seem primed for the ongoing earnings season. At the same time, the markets appear to have factored in the element of uncertainty regarding the quantum of economic damage from the virus outbreak as it looks to rebuild.
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 its 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 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/894251/top-3-roe-stocks-to-buy-as-markets-seek-to-resume-normalcy?cid=CS-ZC-FT-analyst_blog%7Crw-894251
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Kinross Gold Corporation (KGC) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
Stora Enso Oyj (SEOAY) : Free Stock Analysis Report
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