What are we looking for?
Let's look at Canada's large companies for best return on equity (ROE). We'll use Thomson Reuters ONE's Stock Reports Plus, a portfolio management tool for institutional investors. What this tool will do is allow us to compare current ROE values with average ROE of the past five years.
What is return on equity?
Besides looking at a company's earnings per share, another way to measure its ability to generate profits is return on equity. It calculates how much money a company can generate from what shareholders have invested in it. The calculation is made by taking profit and dividing it by shareholders' equity. More efficient profit machines generate consistently higher ROEs.
More about this screen
We'll look at Canadian companies with market capitalizations larger than $1-billion and order them by the best return on equity for the past 12 months. Investors may want to look for stocks with high recent ROEs, as well as high average ROEs over the past five years.
What did we find out?
There's been a lot of turnover since we did this screen last fall. The companies that are still here include: TMX Group Inc., Research In Motion, Peyto Energy Trust, Potash Corp., Vermilion Energy Trust and Agrium Inc.