For Immediate Release
Chicago, IL – October 1, 2020 – Stocks in this week’s article are CDW Corporation CDW, Best Buy Co., Inc. BBY, Applied Materials, Inc. AMAT, NRG Energy, Inc. NRG and KLA Corporation KLAC.
Top ROE Stocks to Buy as Markets Appear Edgy Before Polls
The U.S. equity markets continued to be under pressure due to no significant developments on the COVID-19 vaccine front and lack of consensus on an additional stimulus package from the government. Intense volatility became the norm of the season as markets appeared to have a rebalancing action. The first Presidential debate between the two candidates from the bipartisan parties further sparked a downtrend as markets appeared edgy and awaited signs of a potential winner.
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 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/1069222/top-5-roe-stocks-to-buy-as-markets-appear-edgy-before-polls
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Best Buy Co., Inc. (BBY) : Free Stock Analysis Report
KLA Corporation (KLAC) : Free Stock Analysis Report
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
NRG Energy, Inc. (NRG) : Free Stock Analysis Report
CDW Corporation (CDW) : Free Stock Analysis Report
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