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3 Large-Cap Stocks With High Return on Equity

These businesses have been very efficient in generating profits

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Alberto Abaterusso
Sep 24, 2021

Summary

  • Rio Tinto PLC, Gartner Inc and Pool Corp have higher return on equity ratios than most of their peers.
  • Wall Street likes these stocks.
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When a company's return on equity (ROE) ratio is better than most of its competitors, it generally indicates that the company has been very efficient in generating profits. Thus, investors may want to consider the following stocks, as they are performing better than most of their peer group companies in terms of a higher ROE ratio.

Rio Tinto PLC

The first stock investors could be interested in is Rio Tinto PLC (

RIO, Financial), a London-based metals and mining company.

Rio Tinto PLC has a ROE ratio of 49.24% (versus the industry median of -13.96%), ranking higher than 96% of 2,177 companies that are operating in the metals and mining industry.

The share price was $67.05 at close on Thursday, having increased 11.1% over the past year for a market capitalization of $107.09 billion and a 52-week range of $55.39 to $95.97.

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The stock has a price-book ratio of 1.60 and a price-earnings ratio of 5.81.

GuruFocus has assigned a score of 6 out of 10 to the company's financial strength rating and 8 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $94.66 per share.

Gartner Inc

The second stock investors could be interested in is Gartner Inc (

IT, Financial), a Stamford, Connecticut-based information technology company providing services to its customers in North America and internationally.

Gartner Inc has a ROE ratio of 152.89% (versus the industry median of 4.67%), which ranks higher than 98% of the 2,296 companies that are operating in the software industry.

The share price has increased by 158.06% over the past year to trade at $324.25 at close on Thursday for a market capitalization of $27.12 billion and a 52-week range of $115.86 to $324.80.

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The stock has a price-book ratio of 51.71 and a price-earnings ratio of 49.96.

GuruFocus has assigned a score of 4 out of 10 to the company's financial strength rating and 9 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $314.57 per share.

Pool Corp

The third stock investors could be interested in is Pool Corp (

POOL, Financial), a Covington, Louisiana-based builder of swimming pools and related leisure products worldwide.

Pool Corp has a ROE ratio of 135.55% (versus the industry median of -3.82%), ranking it higher than 99% of the 808 companies that are operating in the travel and leisure industry.

The share price has risen by 48% over the past year to trade at $466.37 at close on Thursday, determining a market capitalization of $18.70 billion and a 52-week range of $305.47 to $500.85.

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The price-book ratio is 21.40 and the price-earnings ratio is 35.44.

GuruFocus has assigned a score of 6 out of 10 to the company's financial strength rating and 9 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $512.43 per share.

Disclosure: I have no positions in any securities mentioned.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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