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For Immediate Release

Chicago, IL – August 2, 2018 - Stocks in this week’s article are Celgene Corporation CELG, The Progressive Corporation PGR, T. Rowe Price Group, Inc. TROW, AMC Networks Inc. AMCX and Celanese Corporation CE.

5 Top ROE Stocks as Q2 Earnings Shine (Despite Tariff Fears)

The earnings season is well past the halfway mark and appears to be on solid footing with decent performance across the table. It seems that the equity markets have more or less factored in the risks from the ongoing trade war (prone to escalate with higher tariffs) and is likely to have a relatively smooth spell, buoyed by improving economic sentiments led by solid domestic job market conditions, higher wage rates and lower taxes.

As investors employ a wait-and-see approach in a classic example of “backing and filling” in the market, they could benefit from ‘cash cow’ stocks that garner higher returns.

However, singling out cash-rich stocks alone does not make for a solid investment proposition unless these are backed by attractive efficiency ratios like return on equity (ROE). A high ROE ensures that the company is reinvesting its cash at a high rate of return.

Why ROE?

ROE = Net Income/Shareholders’ Equity

ROE helps investors distinguish profit-generating companies from profit burners and is useful in determining the financial health of a company. In other words, this financial metric enables investors to identify stocks that diligently deploy cash for higher returns.

Moreover, ROE is often used to compare the profitability of a company with other firms in the industry — the higher, the better. It measures how well a company is multiplying its profits without investing new equity capital and portrays management’s efficiency in rewarding shareholders with attractive risk-adjusted returns.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/315315/top-5-roe-picks-as-q2-earnings-shine-despite-trade-war-woes

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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