For Immediate Release
Chicago, IL – November 20, 2019 - Stocks in this week’s article are CDW Corp. (NASDAQ:CDW) , Sony Corp. (NYSE:SNE) , Applied Materials, Inc. (NASDAQ:AMAT) , Stryker Corp. (NYSE:SYK) and Lam Research Corp. (NASDAQ:LRCX) .
5 ROE Stocks to Buy as Market Basks in Trade Deal Optimism
The U.S. equity market continued its uptrend and charted new record highs with the United States and China nearing a historic trade deal. The “Phase One” partial trade accord is widely expected to ease tensions related to the tariff war and propel the markets to record territories in the near future. Despite the ‘feel good’ factor, the fluid nature of the prolonged negotiation process for the finer details of the agreement remains a latent threat for the stock market.
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.
Why ROE?
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/627203/5-roe-stocks-to-buy-as-market-basks-in-trade-deal-optimism
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CDW Corporation (CDW): Free Stock Analysis Report
Sony Corporation (SNE): Free Stock Analysis Report
Stryker Corporation (SYK): Free Stock Analysis Report
Applied Materials, Inc. (AMAT): Free Stock Analysis Report
Lam Research Corporation (LRCX): Free Stock Analysis Report
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