3 High ROE Stocks to Bet on as Markets Surge on Economic Strength

Zacks11-22 22:27

The broader equity markets moved northward yesterday as investors shrugged off the worries about escalating geopolitical tensions related to the Russia-Ukraine war and invested heavily in cyclical ...

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Despite Russia’s President Putin ratcheting up his war rhetoric with a veiled nuclear threat after outgoing President Biden approved the use of U.S.-made missiles against Russia, investors snapped up stocks that are perceived to be the likely beneficiaries of Trump trade. However, continued geopolitical unrest in the Middle East remains a latent threat, leading to market uncertainty and a volatility slugfest.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 . ","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0786609619.USD":"高盛全球千禧一代股票组合Acc","LU0708994859.HKD":"TEMPLETON GLOBAL \"A\" (HKD) ACC","ROE":"ASTORIA US QUALITY KINGS ETF","BK4598":"佩洛西持仓","RF":"地区金融","LU0029864427.USD":"TEMPLETON GLOBAL \"A\" (USD) INC","BK4532":"文艺复兴科技持仓","BK4554":"元宇宙及AR概念","LU1894683348.USD":"AMUNDI FUNDS US EQUITY RESEARCH VALUE \"A2\" (USD) INC","LDOS":"Leidos Holdings Inc","LU0128525929.USD":"TEMPLETON GLOBAL \"A\" (USD) ACC","BK4108":"电影和娱乐","SG9999015952.SGD":"LIONGLOBAL DISRUPTIVE INNOVATION \"I\" (SGD) ACC","BK4507":"流媒体概念","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","DIS":"迪士尼","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","BK4211":"区域性银行","LU0310800379.SGD":"FTIF - Templeton Global A Acc SGD","BK4524":"宅经济概念","BK4550":"红杉资本持仓","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","BK4588":"碎股","BK4123":"调查和咨询服务","SG9999015945.SGD":"LionGlobal Disruptive Innovation Fund A SGD","LU1894683264.USD":"AMUNDI FUNDS US EQUITY RESEARCH VALUE \"A2\" (USD) ACC","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","BK4551":"寇图资本持仓","LU0011850046.USD":"贝莱德全球长线股票 A2 USD","SG9999015986.USD":"LIONGLOBAL DISRUPTIVE INNOVATION \"I\" (USD) ACC","BK4561":"索罗斯持仓","SG9999015978.USD":"利安颠覆性创新基金A","LU1267930573.SGD":"TEMPLETON GLOBAL \"AA\" (SGD) ACC A","BK4581":"高盛持仓","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","LU0006061336.USD":"Blackrock US Small and MidCap Opportunities A2 USD"},"translate_title":"随着市场因经济实力而飙升，值得押注的3只高净资产收益率股票","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ROE":1,"RF":1,"DIS":1,"LDOS":0.9},"content_text":"The broader equity markets moved northward yesterday as investors shrugged off the worries about escalating geopolitical tensions related to the Russia-Ukraine war and invested heavily in cyclical stocks poised to benefit from a booming economy. Despite Russia’s President Putin ratcheting up his war rhetoric with a veiled nuclear threat after outgoing President Biden approved the use of U.S.-made missiles against Russia, investors snapped up stocks that are perceived to be the likely beneficiaries of Trump trade. However, continued geopolitical unrest in the Middle East remains a latent threat, leading to market uncertainty and a volatility slugfest.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. The Walt Disney Company DIS, Leidos Holdings, Inc. LDOS and Regions Financial Corporation RF are some of the stocks with high ROE to profit from.\nROE: A Key Metric\nROE = Net Income/Shareholders’ EquityROE 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 companies 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.\nScreening Parameters\nIn order to shortlist stocks that are cash-rich with high ROE, we have added Cash Flow greater than $1 billion and ROE greater than X-Industry as our primary screening parameters. In addition, we have taken a few other criteria into consideration to arrive at a winning strategy.Price/Cash Flow lesser than X-Industry: This metric measures how much investors pay for $1 of free cash flow. A lower ratio indicates that investors need to pay less for a better cash flow-generating stock.Return on Assets (ROA) greater than X-Industry: This metric determines how much profit a company earns for every dollar of asset, which includes cash, accounts receivable, property, equipment, inventory and furniture. The higher the ROA, the better it is for the company.5-Year EPS Historical Growth greater than X-Industry: This criterion indicates that continued earnings momentum has translated into solid cash strength.   Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform irrespective of the market environment.Here are three of the seven stocks that qualified the screening:Walt Disney: Burbank, CA-based Walt Disney has assets that span movies, television shows and theme parks. This leading diversified international family entertainment and media enterprise operates through three business segments, namely Entertainment, Sports and Experiences.The company has a long-term earnings growth expectation of 10% and delivered a trailing four-quarter earnings surprise of 13.6%, on average. It has a VGM Score of A. Walt Disney carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. Leidos: Delaware-based Leidos is a global science and technology leader serving the defense, intelligence, civil and health markets. Its core capabilities include providing solutions in the fields of cybersecurity, data analytics, enterprise IT modernization, operations and logistics, sensors, collection and phenomenology, software development and systems engineering.The company has a long-term earnings growth expectation of 14.8% and delivered a trailing four-quarter earnings surprise of 29.9%, on average. It has a VGM Score of A. Leidos sports a Zacks Rank #1. Regions Financial: Birmingham, AL-based Regions Financial is a financial holding company that provides retail, commercial and mortgage banking, as well as other financial services in asset management, wealth management, securities brokerage, trust services, mergers and acquisitions (M&A) advisory services and other specialty financing.It has a long-term earnings growth expectation of 4.6% and delivered a trailing four-quarter earnings surprise of 4.4%, on average. Regions Financial carries a Zacks Rank #2.You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.  The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.Click here to sign up for a free trial to the Research Wizard today.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. Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nRegions Financial Corporation (RF) : Free Stock Analysis Report\nThe Walt Disney Company (DIS) : Free Stock Analysis Report\nLeidos Holdings, Inc. (LDOS) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2485549260"}