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Alberto Abaterusso
Alberto Abaterusso
Articles (2544) 

A Trio of High Return on Equity Ratio Stock Picks to Consider

These companies are more profitable than most of their peers

January 21, 2021 | About:

When a company's return on equity (ROE) ratio beats most of its peers, it indicates the company has been very efficient 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 ratio.

Erie Indemnity Co

The first stock to consider is Erie Indemnity Co (NASDAQ:ERIE), an Erie, Pennsylvania-based attorney-in-fact acting on behalf of the subscribers at the Erie Insurance Exchange, an insurance broker in the U.S.

Erie has a ROE ratio of 29.23% (versus the industry median of 7.35%), ranking higher than 93% of 498 companies that are operating in the insurance industry.

The share price has grown by 44.81% over the past year and closed at $242.66 on Wednesday for a market capitalization of $12.69 billion and a 52-week range of $130.20 to $261.20.

The stock has a price-book ratio of 10.17 and a price-earnings ratio of 43.72.

GuruFocus has assigned a score of 7 out of 10 to both the company's financial strength rating and its profitability rating.

On Wall Street, the stock has a median recommendation rating of overweight.

BWX Technologies Inc

The second stock to consider is BWX Technologies Inc (NYSE:BWXT), a Lynchburg, Virginia-based manufacturer and supplier of nuclear components primarily to the U.S. aerospace and defense industry.

BWX Technologies has a ROE ratio of 56.74% (compared to the industry median of 4.32%), which ranks higher than 97% of the 236 companies that are operating in the aerospace and defense industry.

The share price has decreased by nearly 9% over the past year down to $58.88 at close on Wednesday for a market capitalization of $5.61 billion and a 52-week range of $40.40 to $70.57.

The stock has a price-book ratio of 10.20 and a price-earnings ratio of 20.59.

GuruFocus has assigned a score of 5 out of 10 to the financial strength rating and of 8 out of 10 to the profitability rating of the company.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $71.13 per share.

SPX Corp

The third stock to consider is SPX Corp (NYSE:SPXC), a Charlotte, North Carolina-based global supplier of HVAC systems and specialty industrial types of machinery.

SPX Corp has a ROE ratio of 16.07% (versus the industry median of 4.96%), ranking higher than 93% of the 2,484 companies that are operating in the industrial products industry.

The share price has risen by 14.17% over the past year up to $59.22 at close on Wednesday for a market capitalization of $2.65 billion and a 52-week range of $25.50 to $60.06.

The price-book ratio is 4.54 and the price-earnings ratio is 26.09.

GuruFocus has assigned a score of 4 out of 10 to the financial strength rating and a score of 5 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 $58.75 per share.

Disclosure: I have no positions in any security mentioned in this article.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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