Chicago, IL – November 25, 2024 – Stocks in this week’s article are The Walt Disney Co. DIS, Leidos Holdings, Inc. LDOS and Regions Financial Corp. RF.
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 Co., Leidos Holdings, Inc. and Regions Financial Corp. are some of the stocks with high ROE to profit from.
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 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.
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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2373939/3-high-roe-stocks-to-bet-on-as-markets-surge-on-economic-strength
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks “Terms and Conditions of Service” disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want 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
Regions Financial Corporation (RF) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
