For Immediate Release
Chicago, IL – February 25, 2020 – Stocks in this week’s article are CDW Corp. CDW, Sony Corp. SNE, Applied Materials, Inc. AMAT, Lam Research Corp. LRCX and Delta Air Lines, Inc. DAL.
5 ROE Stocks to Buy as Coronavirus Shakes Global Markets
Equity markets across the globe fell sharply as the coronavirus pandemic wreaked havoc beyond the geographical territories of its country of origin and affected countless people in far-off places. The death toll has swelled to 2,465 worldwide so far, with 23 outside mainland China and 78,800 confirmed cases globally. With the communist government publicly admitting its failure to contain the spread of the virus, markets went on a tailspin fearing a global economic slowdown driven by the cascading effect of the deadly disease. Experts widely anticipate that global growth is likely to decelerate significantly in the first quarter of 2020 before making a probable turnaround in the remainder of the year.
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 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.
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Sony Corporation (SNE) : Free Stock Analysis Report
Lam Research Corporation (LRCX) : Free Stock Analysis Report
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
CDW Corporation (CDW) : Free Stock Analysis Report
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