The 5 Most Predictable Companies with Highest Return on Assets
Return on assets indicates how much profit a company makes on its total assets. Technically, it tells what earnings were generated from invested capital (assets). The formula is: Net Income/Total Assets. The higher the better.
Apollo Group (NASDAQ:APOL)
Apollo Group operates for profit education subsidiaries University of Phoenix, Apollo Global, College for Financial Planning and Institute for Professional Development. Its return on assets was the fifth-highest of companies the screener found, at 16.66%, increased slightly from 16.11% the prior year. The five-year average ROA for the industry is 5.2%.
The company had to make changes in how it recruits students in 2010, which resulted in a 4% decline in revenue to $4.7 billion in 2011. Net income increased from $553 billion in 2010 to $572 billion in 2011. Total assets also declined from $3.6 billion in 2010 to $3.3 billion in 2011.
Medifast Inc. (NYSE:MED)
Medifast produces, distributes and sells weight and health management products with the brand names Medifast, Take Shape for Life, Hi-Energy Weight Control Centers and Woman’s Wellbeing.
Its return on assets in the third quarter of 2011 was 19.6%, which has been increasing in the past several years. The average return on assets for the specialty retail industry is 10.48% for the trailing 12 months.
The company’s total assets amounted to $94 million in 2010, which increased from $62.8 million in 2009. Net income also increased to $19.6 million in 2010 from $12 million in 2009.
Boston Beer Inc. (NYSE:SAM)
Boston Beer Inc. is the largest brewer of handcrafted beers in America. Boston Beer is a growing company that recently saw a large increase in its return on assets. It increased from 19.3% in 2010 to 29.7% in 2011, and was negative as recently as 2008. The average return on assets for the beverages industry in the trailing 12 months is 9.47%.
In 2011, the company’s total assets increased to $272.5 million from $258.5 million in 2010. Net income increased to $66 million from $50 million.
Alliances Resources Partners (NASDAQ:ARLP)
Alliance Resources Partners is a coal producer and marketer primarily in the eastern U.S. Its ROA has been increasing since 2008 and increased to 22.5% in 2011 from 21.4% in 2010. The average return on assets for the oil, gas & consumable fuels industry in the trailing 12 months is 24.47%.
In 2011, its total assets increased to $1.7 billion from $1.1 billion in 2010. Its net income increased to $389 million from $321 million.
Factset Research Systems Inc. (NYSE:FDS)
Factset researches global market trends and develops analytical tools for investors. Of all of GuruFocus’ 5-star predictable companies, it has the highest return on assets at 27%. ROA has been increasing over the past several years. The average return on assets for the software industry for the trailing 12 months is 13.07%.
In 2011, the company’s total assets increased to $657 million from $645 the prior year. Its net income increased to $171 million from $150.
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