RETURNS ON EQUITY

RETURN ON EQUITY




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New Companies
Company  ROE  Country Industry
Bioverativ32.90%USAHealth Care
BOC Aviation15.10%Hong-KongIndustrials
Orient Securities (H27.60%ChinaFinancials
Varex Imaging14.60%USAHealth Care
Hilton Grand Vacations0.00%USAConsumer Services
Park Hotels & Resort10.90%USAFinancials
Conduent-16.60%USAIndustrials
China International Capital16.30%ChinaFinancials
Yum China Holdings23.40%USAConsumer Services
Versum Materials76.80%USABasic Materials
Samsung Biologics0.00%KoreaHealth Care
Quality Care Property2.10%USAFinancials
Nishi-Nippon Financi5.90%JapanFinancials
Liberty Expedia Holding53.00%USAConsumer Services
Lamb Weston Holdings20.80%USAConsumer Goods
Kyushu Railway-81.20%JapanIndustrials

Return on Equity ratio measures the ability of a company to generate profits from its own equity (capital less debt).

However, all companies with a return on equity (ROE) high do not necessarily make good investments. Some have high ROE because they require little equity (consulting firm, for example). Other industries require significant infrastructure so they need much more Equity. These two kinds of firms are not comparable only looking at ROE. Indeed, capital-intensive industries are located in markets where barriers to entry limit the competition. High rate of return companies (high ROE) with little equity contribution will be competing more strongly because the entry barriers will be more permeable. In the latter case, the risk of being copied by competitor is higher.

return on equity ROE

Like many financial ratios, ROE only makes sense when one wishes to compare companies in the same sector.

A high ROE provides no immediate benefit. The price of a share is primarily guided by the earnings per share. However, in the context of globalization, large companies operating with corporate governance are trying to accomplish certain goals, including a high return on equity for shareholders, which orient their policies.

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