First of all, what is ROE?
ROE (Return on Equity) is an abbreviation for Return on Equity, and is an indicator of how much profit a company has generated relative to its own capital.
In other words, the ratio of net income to equity is as follows: Net profit ÷ equity = ROE (%) Equity capital is the money collected from shareholders.
This ratio shows how efficiently a company uses shareholder money to generate profits.
In other words, it is one of the indicators that shows how attractive a company is. The higher this number, the more efficiently the business is operating.
ROE Ranking for US Stocks !
First, we have summarized the ROE rankings from 1st to 40th in the familiar US stock S&P 500.
First place goes to AmerisourceBergen Corporation.
It’s not very familiar in Japan. It can be seen that there are many companies in the US with an ROE of 20 or more.
In Japan, it’s around 5-10.
The advantage of US stocks over Japanese stocks is that they are managed well. One of the reasons I prefer US stocks and companies is this high ROE.
| No. | Ticker | Company | Sector | ROE(%) |
| 1 | ABC | AmerisourceBergen Corporation | Healthcare | 557.3 |
| 2 | CL | Colgate-Palmolive Company | Consumer Defensive | 448.4 |
| 3 | STX | Seagate Technology Holdings plc | Technology | 447.8 |
| 4 | KMB | Kimberly-Clark Corporation | Consumer Defensive | 317.3 |
| 5 | SEE | Sealed Air Corporation | Consumer Cyclical | 269.9 |
| 6 | CAH | Cardinal Health, Inc. | Healthcare | 199.9 |
| 7 | AMGN | Amgen Inc. | Healthcare | 199.7 |
| 8 | GEN | Gen Digital Inc. | Healthcare | 195.7 |
| 9 | WAT | Waters Corporation | Healthcare | 183.4 |
| 10 | AAPL | Apple Inc. | Technology | 160.9 |
| 11 | MA | Mastercard Incorporated | Financial | 145.6 |
| 12 | MAR | Marriott International, Inc. | Consumer Cyclical | 143 |
| 13 | WYNN | Wynn Resorts, Limited | Consumer Cyclical | 131.7 |
| 14 | NTAP | NetApp, Inc. | Technology | 121 |
| 15 | IDXX | IDEXX Laboratories, Inc. | Healthcare | 118.4 |
| 16 | SYY | Sysco Corporation | Consumer Defensive | 114.8 |
| 17 | KLAC | KLA Corporation | Technology | 112.8 |
| 18 | AON | Aon plc | Financial | 106.4 |
| 19 | CDW | CDW Corporation | Technology | 103.5 |
| 20 | CLX | The Clorox Company | Consumer Defensive | 101.6 |
| 21 | DVA | DaVita Inc. | Healthcare | 99.4 |
| 22 | LW | Lamb Weston Holdings, Inc. | Consumer Defensive | 99 |
| 23 | QCOM | QUALCOMM Incorporated | Technology | 88.1 |
| 24 | ABBV | AbbVie Inc. | Healthcare | 85.6 |
| 25 | SHW | The Sherwin-Williams Company | Basic Materials | 81.6 |
| 26 | ADP | Automatic Data Processing, Inc. | Industrials | 80.5 |
| 27 | ITW | Illinois Tool Works Inc. | Industrials | 80.5 |
| 28 | PSA | Public Storage | Real Estate | 79.4 |
| 29 | CF | CF Industries Holdings, Inc. | Basic Materials | 78.6 |
| 30 | OXY | Occidental Petroleum Corporation | Energy | 77.2 |
| 31 | LRCX | Lam Research Corporation | Technology | 74.1 |
| 32 | POOL | Pool Corporation | Consumer Cyclical | 73 |
| 33 | UPS | United Parcel Service, Inc. | Industrials | 71.1 |
| 34 | IRM | Iron Mountain Incorporated | Real Estate | 71.1 |
| 35 | MRNA | Moderna, Inc. | Healthcare | 70 |
| 36 | GWW | W.W. Grainger, Inc. | Industrials | 68.3 |
| 37 | LLY | Eli Lilly and Company | Healthcare | 65.4 |
| 38 | ENPH | Enphase Energy, Inc. | Technology | 65 |
| 39 | MCO | Moody’s Corporation | Financial | 64.3 |
| 40 | ULTA | Ulta Beauty, Inc. | Consumer Cyclical | 64.3 |
Please see below for the latest data.
Points to note about ROE
Below is the ROE of the stocks I own.
You can see that Coca-Cola and Unilever have a high ROE of approximately 50%.
| Company | ROE（％） | ROA（％） |
| 16.1 | 13.4 | |
| Amazon | 22.7 | 7.0 |
| Coca Cora | 48.4 | 11.1 |
| Unilever | 54.2 | 12.1 |
| VISA | 38.2 | 19.0 |
So, we need to be careful about whether the management efficiency of Coca-Cola and Unilever is much higher than that of Google and Amazon.
In addition to shareholder capital, many companies actually use borrowed funds to manage their operations.
This metric is ROA (Return on Total Assets).
If you compare this ROA, you can see that there is not that big of a difference.
In other words, Coca-Cola and Unilever rely on borrowed funds to operate their businesses.
Although ROE is an important indicator, looking at ROA at the same time will give you a more realistic view of the business situation.
Summary
We introduced ROE rankings for American stocks.
It is a good idea to check ROA while using ROE as a yardstick for lean management.
You can check heat map for stock as shown below.