The stock market ended the first half of 2021 on a high note as investors shrugged off inflation worries. The S&P 500 jumped to its seventh consecutive record last Friday, which marked its best such streak since 1997. And the Dow hit its first closing records since early May on July 2.

The Nasdaq also continued its impressive run that’s once again seen Wall Street dive into beaten-down technology names every chance it gets. The tech-heavy index touched another fresh high Tuesday, as investors look to the improving S&P 500 earnings picture and the growing U.S. economy.

The recent positivity follows June’s strong jobs data that gave bullish investors the best of both worlds. The U.S. added more jobs than projected, while unemployment inched up to 5.9% from 5.8%, as more people start looking for work. This means the Fed might not be forced to raise rates sooner than initially projected. In fact, the yield on the 10-year U.S. Treasury note has fallen from 1.75% in late March down to 1.35% to start the trading week.

Even when the central bank does start to raise its core rate, interest rates are poised to remain historically low, likely leaving the market to chase returns in stocks for the foreseeable future. Therefore, investors might want to buy stocks for the second half of 2021. And why not add highly-ranked stocks that have proven they can turn assets into profits…

ROE

Return on Equity or ROE helps investors understand if a firm’s executives are creating assets with investors’ cash or burning it. ROE shows a company’s ability to turn assets into profits. Put another way, this vital metric measures the profits made for each dollar of shareholder equity.

ROE is calculated as net income / shareholder's equity. For example: if $0.10 of assets are created for each $1 of shareholder equity that would equal a ROE of 10%.

Overall, Return on Equity is a great item to use regardless of what type of investor you are since it provides insight into management’s ability to create value and keep costs under control. Plus, if ROE slips, it can alert us to potential problems.

With all that said, let’s take a look at this screen’s parameters and see the companies proving they can return value to shareholders instead of churning through their cash…

• Zacks Rank equal to 1

The Zacks Rank looks at upward earnings estimate revisions, among other metrics, in order to find companies that are projected to see their earnings get stronger. In fact, beginning with a Zacks Rank #1 can be a great starting point because it boasts an average annual return of over 25% per year during the last 30 years.