Today we have identified four Canadian stocks with high return-on-equity (ROE) ratios of more than 100%. ROE is a measure of profitability of a business in relation to its shareholders’ equity. ROE is a key metric for gauging the success of a company, as it measures how well it uses investments to generate earnings growth. A high ROE also signifies strong management, as it shows they have allocated shareholders’ capital to high-return projects.
Greenfields Petroleum Corp (V:GNF)
Greenfields Petroleum Corp. is a junior oil and natural gas exploration and development corporation focused on the development and production of proven oil and gas reserves principally in the Republic of Azerbaijan.
TTM Revenues: $30.7 million
MarketCap: $28.8 million
Return on Equity: 135.8%
Price ChgPct YTD: -44.8%
Our take: Return on equity is a key measure of profitability that reveals how much profit a company makes with its shareholder’s equity. This metric is important for investors as it allows them to judge how efficiently a company uses their investment to generate additional revenues and net income. Although high ROE is a sign of a company’s efficiency, investors should analyze factors that may artificially boost ROE, including write-downs, share buybacks, dividend payouts and high levels of debt. ROE generally varies by industry and is used as a benchmark to select stocks within an industry. This article indentifies Canadian stocks across sectors that have ROE ratios of more than 100%.
Inter Rock Minerals Inc. (V:IRO)
Inter Rock Minerals Inc. explores and mines for mineral reserves in North America and Europe.The company is engaged in the production and marketing of high-purity dolomite throughout the U.S.
TTM Revenues: $45.8 million
MarketCap: $5.6 million
Return on Equity: 124.3%
Price Chg Pct YTD: 66.7%
Paramount Resources Ltd. (TO:POU)
Paramount Resources Ltd. explores and develops unconventional and conventional petroleum and natural gas prospects, including long-term unconventional exploration and pre-development projects, and holds a portfolio of investments in other entities. The company operates primarily in western Canada.
TTM Revenues: $214.1 million
MarketCap: $3.2billion
Return on Equity: 118.6%
Price Chg Pct YTD: 46.1%
Medicure Inc. (V:MPH)
Medicure Inc. is a cardiovascular drug discovery and development company focused on developing therapeutics for unmet needs in the field of cardiovascular medicine. The company’s current focus is on the prevention and treatment of ischemia, ischemic reperfusion injury, and stroke.
TTM Revenues: $53.1 million
MarketCap: $125.2 million
Return on Equity: 113.7%
Price Chg Pct YTD: -22.2%
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in any of the companies mentioned above.