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.
From the annual reports for some companies with December 2014 year end, the following data were extracted:
|Company||ROE (%)||EPS ($)||NAV ($)||Div ($)|
NAV = Net Asset Value
EPS = Earnings per share
Div = Cash Dividend
Of the three banks, OCBC had the best ROE at 14.8%. Of the three marine and offshore outfits, SembCorp Marine had the highest ROE at 19.8%. M1 stands at the top in the table with ROE at 44.5%. Comfort Delgro’s ROE was 13.1%.
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