Uncovering a company’s earnings power

Clime Investment Management

Clime Investment Management

Return on equity (ROE) plays a vital role within Clime's investing methodology and represents a company’s earnings power. It’s the amount of profit a company generates relative to the amount of shareholders’ capital added to the business via equity raisings and retained earnings. Companies with higher returns on equity are worth more, all else equal, especially if they have higher reinvestment rates. Du Pont analysis is a simple, yet a very useful way to uncover the drivers of a company’s ROE, and today, we walk you through the basics of the Du Pont analysis and compare three Australian listed companies - ARB Corp, Woolworths and Qantas as a case study. (VIEW LINK)

3 stocks mentioned

Clime Investment Management
Clime Investment Management
Funds Management & Stock Research
Clime Investment Management

The Clime Group is a respected and independent Australian Financial Services Company, which seeks to deliver excellent service and strong risk-adjusted total returns, closely aligned with the objectives of our clients.

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