5 High ROE Stocks to Buy as Markets Retreat on China Tariff Stalemate

Market Overview - The broader equity market experienced a pullback after reaching record highs, influenced by strong quarterly earnings across sectors and stalled tariff negotiations with China [1][8] - Uncertainty surrounding potential interest rate cuts by the Federal Reserve is increasing, with expectations that the benchmark rate will remain between 4.25% and 4.5% [2] Investment Opportunities - Companies with high Return on Equity (ROE) are highlighted as attractive investment options, including Walt Disney Company, TE Connectivity, Fortinet, Banco Bilbao Vizcaya Argentaria, and ON Semiconductor [2][8] - High ROE indicates effective reinvestment of cash at high returns, making these companies appealing to investors [3][4] Screening Criteria - The screening parameters for identifying cash-rich stocks include: - Cash Flow greater than $1 billion and ROE exceeding the industry average [5] - Price/Cash Flow ratio lower than the industry average, indicating better value for cash flow [5] - Return on Assets (ROA) greater than the industry average, reflecting profitability per dollar of assets [6] - 5-Year EPS Historical Growth greater than the industry average, indicating sustained earnings momentum [6] - Zacks Rank of 1 (Strong Buy) or 2 (Buy), suggesting potential for outperformance [7] Company Profiles - Walt Disney: Long-term earnings growth expectation of 11.8% with a trailing four-quarter earnings surprise of 16.4% on average, Zacks Rank 2 [9] - TE Connectivity: Long-term earnings growth expectation of 9.8% with a trailing four-quarter earnings surprise of 4.9% on average, Zacks Rank 1 [10][11] - Fortinet: Long-term earnings growth expectation of 13.4% with a trailing four-quarter earnings surprise of 23.8% on average, Zacks Rank 2 [12][13] - Banco Bilbao: Long-term earnings growth expectation of 6.9% with a trailing four-quarter earnings surprise of 6.3% on average, Zacks Rank 1 [14] - ON Semiconductor: Long-term earnings growth expectation of 5.3% with a trailing four-quarter earnings surprise of 2.8% on average, Zacks Rank 2 [15]