Bet on Winning DuPont Analysis & Pick These 2 Top Stocks

Core Insights - Return on equity (ROE) is a key profitability metric favored by investors, measuring earnings generated from equity [1] - Advanced analysis of ROE through DuPont analysis can provide deeper insights into a company's financial condition by breaking down ROE into profit margin, asset turnover ratio, and equity multiplier [2][3] DuPont Analysis - DuPont analysis allows investors to assess the components affecting ROE, helping to differentiate between companies with high margins and those with high turnover [3] - It also highlights a company's leverage status, indicating that a high ROE could be misleading if it results from excessive debt [4] Screening Parameters - Key screening parameters for identifying strong stocks include: - Profit Margin of 3% or higher, indicating profitable business operations [6] - Asset Turnover Ratio of 2 or higher, reflecting management efficiency in asset utilization [6] - Equity Multiplier between 1 and 3, showing the extent of debt used to finance assets [6] - Zacks Rank of 1 (Strong Buy) or 2 (Buy), suggesting better performance compared to peers [7] - Current Price above $5 to filter out low-priced stocks [7] Stock Examples - WalMart de Mexico (Zacks Rank 2) operates 587 commercial units and has an expected EPS growth of 8.23% over the next 3-5 years [7][8] - EverQuote (Zacks Rank 1) operates an online marketplace for various insurance products, reporting an average earnings surprise of 149.6% over the past four quarters and holds a top Growth Score of A [8]