For Immediate Release
Screen of the Week of Zacks Investment Research:
Top 5 ROE Picks as Trade Dispute with China & Canada Lingers
The U.S. equity markets snapped its recent winning streak as President Trump decided to impose tariffs on $200 billion worth of imported goods from China. To add to the woes, U.S. negotiations with Canada fell flat as both the parties missed the Friday deadline to script a renewed NAFTA deal. While Trump has threatened to redraw the tripartite trade deal to a bilateral agreement centered around Mexico, Canada has also made it clear that it would not sign a deal until it benefits its citizens.
As investors employ a wait-and-see approach in a classic example of "backing and filling" in the market, they could benefit from 'cash cow' stocks that garner higher returns.
However, singling out cash-rich stocks alone does 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.
And that's what we're screening for today…
For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/321289/top-5-roe-picks-as-trade-dispute-with-china-amp-canada-lingers
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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.
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Contact: Jim Giaquinto
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