Return on Equity (ROE) is an important indicator for investors. It tells investors how much the company is earning (profits) for the shareholders. It is net profits attributable to shareholders divided by shareholders’ funds calculated as a percentage term.
The higher the ROE, the better for the shareholders. Because it is calculated as percentage term, we can compare one ROE with another ROE of another company.
I had extracted ROE data for some select stocks from Morningstar’s database.
|Stock||Share Price at 31/12/2014||ROE (%)|
|SBS Transit 500||1.705||4.56|
Note: StarHub has a unique shareholder fund compared with all other companies. The Group has a very low shareholders’ fund because of substantial goodwill written off.
The table gives an indication of ROE for each company (as computed by Morningstar). The future ROE is not known until the company releases its final annual report.
Please use these data with caution.
Copyright © 2015, limkimtong for Living Investment
The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.