When a company's return on equity (ROE) outperforms the majority of its competitors, it implies the business has been more efficient than its peers in generating earnings.
Thus, investors may want to consider the following companies, as they are beating most of their competitors in terms of a higher ROE.
PayPal Holdings Inc
The first stock to consider is PayPal Holdings Inc (PYPL, Financial), a San Jose, California-based provider of an online payment system to consumers and merchants worldwide.
PayPal has an annualized ROE of 22.61% as of the quarter that ended in Sepember, while the industry median is 4.50%.
The share price grew 121% over the past year up to $238.64 at close on Thursday, Dec. 24 for a market capitalization of $279.61 billion and a 52-week range of $82.07 to $244.25.
The stock has a price-book ratio of 15.13 and a price-earnings ratio of 90.05.
GuruFocus has assigned a financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10 to the company.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $231.40 per share.
Comcast Corp
The second stock to consider is Comcast Corp (CMCSA, Financial), a Philadelphia-based global operator of media and technology.
Comcast has an annualized ROE of 9.51% as of the quarter that ended in September compared to the industry median of -1.39%.
The share price has increased by 11.5% over the past year up to $50.38 at close on Thursday, Dec. 24 for a market capitalization of $230.5 billion and a 52-week range of $31.71 to $52.49.
The stock has a price-book ratio of 2.67 and a price-earnings ratio of 22.59.
GuruFocus has assigned a score of 4 out of 10 for the financial strength rating and a score of 8 out of 10 for the profitability rating of the company.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $54.07 per share.
Nike Inc
The third stock to consider is Nike Inc (NKE, Financial), a Beaverton, Oregon-based designer and seller of athletic footwear and accessories.
Nike has an annualized ROE of 70.28% as of the quarter that ended in August, while the industry has a median of 0.79%.
The share price has risen by 40.5% over the past year up to $141.60 at close on Thursday, Dec. 24 for a market capitalization of $222.29 billion and a 52-week range of $60 to $147.95.
The price-book ratio is 21.42 and the price-earnings ratio is 80.91.
GuruFocus has assigned a score of 6 out of 10 to the financial strength rating and a score of 8 out of 10 to the profitability rating of the company.
On Wall Street, the stock has a median recommendation rating of buy with an average target price of $163.51 per share.
Disclosure: I have no positions in any security mentioned in this article.
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