What Makes a Stock a High ROE Stocks List constituent?
This screen identifies companies generating a Return on Equity (ROE) of at least 20% with a market cap over $1 billion. By filtering for these thresholds, we isolate high-quality compounders like Microsoft, which maintained ROE above 20% for most of the 2010s, signaling a durable competitive advantage.
Filter for Capital Efficiency
We set ROE at 20% to capture elite firms. For example, Apple's massive share buybacks pushed its ROE above 100% in 2022, proving how capital allocation drives returns.
Validate Operational Quality
We require a Debt/Equity ratio under 1.0 to ensure ROE isn't just financial engineering, unlike General Electric in 2017, which struggled with high leverage.
Ensure Proven Scale
A $1B market cap floor filters out micro-cap volatility. This ensures the 20% ROE is sustainable, similar to how Visa maintained high margins during the 2020 pandemic.