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High ROE Stocks

Return on Equity (ROE) as the name suggests is the amount of return that a company earns by using the funds generated from issuing equity shares. It is a measure of the financial performance of a company.

ROE is derived by dividing net income by shareholders' equity. To make an investment decision it is wise to compare the stock's ROE with its peers.

An ROE which equals to or slightly above the industry ROE ratio should be preferred. Of course, high ROE stocks are good for investment because the company has a high earning capacity.

However, a very high ROE ratio compared to the industry may prove to be risky because this might indicate a low equity portion in the company's finance pool.

Companies with sustainable ROE that grow consistently in confirmation with industry ROE are attractive for investment.

However, studying the ROE ratio in isolation may not give a clear picture. There are various aspects that an investor has to consider while selecting fundamentally strong stocks.

Check out Equitymaster's powerful stock screener for finding the high ROE stocks in India.


How to Find the Best Indian Companies by Return on Equity

May 6, 2024

How to go about finding the top stocks in India based on return on equity? Find out...

Top 5 Smallcap Growth Stocks with High ROE and ROCE

Aug 31, 2022

These 5 quality small-cap stocks have shown consistent growth across metrics and come with high ROE and ROCE.

4 Popular Stocks with Sound Management, Strong Fundamentals and High ROE. Worth a Look?

Apr 18, 2022

Here's the list of top 4 stocks, as determined by some of the company's most critical qualitative attributes.

Is all really well with high RoE companies?

Apr 14, 2012

Equitymaster finds out which BSE 500 companies have highest RoEs and why.

Indian Mutual Funds are Buying These 5 Stocks Aggressively

Jan 10, 2023

Mutual funds have consistently increased their holding in these stocks, in the past four or more quarters.

5 High ROE Companies to Add to Your "Multibagger" Watchlist

Jun 27, 2022

The ROE is one of the most important metrics as it tells us how much profit the firm generates for each rupee of equity it owns.

6 Stocks with Consistently Increasing Return Ratios

Jan 11, 2022

Look for trends in return ratios over many years and analyse each of its components.