When a company's return on equity (ROE) ratio outperforms most of its competitors, it indicates the company has been very efficient in generating profits.
Thus, investors may want to consider the following securities, as they are outperforming most of their colleagues in terms of a higher ROE ratio.
Alpha Pro Tech Ltd
The first stock to consider is Alpha Pro Tech Ltd (APT, Financial), a Canadian developer of construction weatherization products and manufacturer of several disposable protective apparel and infection control products such as lab coats, hoods, face masks and shields.
Alpha Pro Tech Ltd has a ROE ratio of 51.71% (versus the industry median of 5.59%), ranking higher than 99% of 1,512 companies that are operating in the construction industry.
The share price has fallen by 9.61% over the past year and traded at $11.17 at close on Monday for a market capitalization of $151.88 million and a 52-week range of $8.56 to $25.55.
The stock has a price-book ratio of 2.50 and a price-earnings ratio of 5.70.
GuruFocus has assigned a score of 7 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 buy and an average target price of 24.50 Canadian dollars ($19.64) per share.
HDFC Bank Ltd
The second stock to consider is HDFC Bank Ltd (HDB, Financial), a Mumbai, India-based bank with operating activities in India, Bahrain, Dubai and Hong Kong.
HDFC Bank Ltd has a ROE ratio of 18.11% (compared to the industry median of 7.72%), which ranks higher than 92% of the 1,486 companies that are operating in the banks industry.
The share price has risen by 73% over the past year to trade at $80.82 at close on Monday for a market capitalization of $148.46 billion and a 52-week range of $29.50 to $84.70.
The stock has a price-book ratio of 4.19 and a price-earnings ratio of 27.68.
GuruFocus has assigned a score of 3 out of 10 to the financial strength rating and of 6 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 $71.45 per share.
Unilever PLC
The third stock to consider is Unilever PLC (UL, Financial), a London-based international consumer goods company.
Unilever has a ROE ratio of 30.89% (versus the industry median of 6.11%), ranking higher than 96% of the 1,664 companies that are operating in the consumer-packaged goods industry.
The share price was $55.15 at close on Monday, reflecting a 9.5% increase over the past year, determining a market capitalization of $144.93 billion and a 52-week range of $44.06 to $63.89.
The price-book ratio is 7.56 and the price-earnings ratio is 20.78.
GuruFocus has assigned a score of 5 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 overweight with an average target price of $64.31 per share.
Disclosure: I have no positions in any security mentioned in this article.
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