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Zacks
Zacks.com featured highlights include KLA, Leidos, Raymond James Financial, Fortinet and Pilgrim's Pride
Zacks Equity Research
6 min read

In This Article:

For Immediate Release

Chicago, IL – March 5, 2025 – Stocks in this week’s article are — KLA Corp. KLAC, Leidos Holdings, Inc. LDOS, Raymond James Financial, Inc. RJF, Fortinet, Inc. FTNT and Pilgrim's Pride Corp. PPC.

5 High ROE Stocks to Buy as Markets Tank on Tariff Woes

The broader equity markets mostly trended down on average over the past few trading days as President Trump indicated that his proposed tariffs on Canada and Mexico would be imposed from today. The 25% levy on imports from each of the neighboring countries with an additional 10% tariff on China, which doubled the 10% duty slapped on Beijing in early February, dashed investors’ hopes of a last-minute deal and triggered a downslide. Although Trump had earlier indicated that reciprocal tariffs on foreign countries would not be imposed immediately, the sudden change in the trade policies toward two of its closest allies is likely to have a ripple effect across the globe.

Moreover, soft economic data for February 2025 for the manufacturing and construction sectors cast aspersions on the state of the U.S. economy. As investors employ a wait-and-see approach in a classic example of “backing and filling” in the market, they can benefit from “cash cow” stocks that garner higher returns.

However, identifying cash-rich stocks alone does not make for a solid investment proposition unless it is backed by attractive efficiency ratios like return on equity (ROE). A high ROE ensures that the company is reinvesting cash at a high rate of return. KLA Corp., Leidos Holdings, Inc., Raymond James Financial, Inc., Fortinet, Inc. and Pilgrim's Pride Corp. are some of the stocks with high ROE to profit from.

ROE: A Key Metric

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 companies 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.

Here are five of the 13 stocks that qualified the screening:

KLA Corporation: San Jose, CA-based KLA Corporation is an original equipment manufacturer of process diagnostics and control equipment and yield management solutions required for the fabrication of semiconductor integrated circuits or chips. The company has a comprehensive portfolio of products addressing each major PDC subsegment — photomask (reticle) inspection, wafer inspection/defect review and metrology.

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