5 Stocks With High ROE to Buy as Markets Bask in Year-End Rally

Core Insights - The broader equity markets experienced a mini recovery, ending a four-day losing streak, driven by cooling inflation and strong performances from key blue-chip stocks [1][2] - The November consumer price index report indicated an annual inflation increase of 2.7%, lower than the expected 3.1%, while core consumer price inflation was at 2.6%, compared to a forecast of 3% [1] Investment Opportunities - Investors are encouraged to focus on "cash cow" stocks with high return on equity (ROE) to maximize returns, as high ROE indicates effective reinvestment of cash [2][3] - TE Connectivity plc (TEL), ZTO Express (Cayman) Inc. (ZTO), Pilgrim's Pride Corporation (PPC), Assurant, Inc. (AIZ), and Host Hotels & Resorts, Inc. (HST) are highlighted as stocks with high ROE and favorable efficiency scores [2][7] Financial Metrics - ROE is defined as Net Income divided by Shareholders' Equity, serving as a key indicator of a company's profitability and financial health [3] - A higher ROE signifies better management efficiency in generating profits without new equity capital [4] Screening Parameters - Stocks were screened based on criteria including cash flow greater than $1 billion, ROE greater than the industry average, price/cash flow ratio lower than the industry average, return on assets (ROA) greater than the industry average, and a 5-year EPS historical growth greater than the industry average [5][6][7] - Zacks Rank of 1 (Strong Buy) or 2 (Buy) was also considered, indicating stocks likely to outperform the market [7] Company Profiles - TE Connectivity: A global technology company focused on connectivity and sensor solutions, with a long-term earnings growth expectation of 12.3% and a trailing four-quarter earnings surprise of 6.5% [8][9] - ZTO Express: A leading express delivery service in China, with a Zacks Rank of 1 and a long-term earnings growth expectation of 3.1% [10][11] - Pilgrim's Pride: Engaged in the production and distribution of chicken products, with a trailing four-quarter earnings surprise of 10.4% and a Zacks Rank of 2 [11][12] - Assurant: A provider of risk management solutions, with a trailing four-quarter earnings surprise of 22.7% and a Zacks Rank of 2 [12][13] - Host Hotels: A leading lodging REIT with a trailing four-quarter earnings surprise of 11% and a Zacks Rank of 2 [14][15]