For Immediate Release
Chicago, IL – October 22, 2019 - Stocks in this week’s article are Mallinckrodt plc MNK, Sony Corp. SNE and Public Storage PSA.
Top 3 ROE Stocks to Profit as Earnings Season Heats Up
The U.S. equity markets are widely anticipated to trade near all-time highs with expectations of solid quarterly results across the board as the earnings season gets heated up. With the Sino-U.S. trade relations nearing a historic deal to ease the tensions related to tariff war, the overall sentiments appear bullish. However, a slowdown in China is likely to be a dampener of sorts, hindering the smooth sail of the equity markets in general.
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, singling out cash-rich stocks alone do not make for a solid investment proposition unless these are 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 = 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/575324/top-3-roe-stocks-to-profit-as-earnings-season-heats-up
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Sony Corporation (SNE) : Free Stock Analysis Report
Mallinckrodt public limited company (MNK) : Free Stock Analysis Report
Public Storage (PSA) : Free Stock Analysis Report
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