Zacks.com featured highlights include: NVR, MEDIFAST, BMC Stock, Universal Forest Products and EMCOR

For Immediate Release

Chicago, IL – September 20, 2019 - Stocks in this week’s article are NVR Inc. NVR, MEDIFAST Inc. MED, BMC Stock Holdings Inc. BMCH, Universal Forest Products Inc. UFPI and EMCOR Group Inc. EME.

5 DuPont-Tested Quality Stock Picks

Return on equity (ROE) can be considered one of the most reliable metrics for investors. That said, we would like to note that the basic ROE calculation doesn’t always tell the complete story and an investor might get misled by picking stocks based on this number.

Thus, taking a step beyond the basic ROE and analyzing it at an advanced level or applying the DuPont technique seems to be an intriguing idea.

Here’s how DuPont breaks down ROE into different components:

ROE = Net Income/Equity

Net Income / Equity = (Net Income / Sales) * (Sales / Assets) * (Assets / Equity)

ROE = Profit Margin * Asset Turnover Ratio * Equity Multiplier

Inside the Strength of DuPont

The DuPont analysis allows investors to evaluate the elements that drive any change in ROE. It helps investors distinguish companies with higher margins from those having a high turnover. In fact, it also focuses on the company’s leverage status. A lofty ROE could be due to the overuse of debt. If this is the case, the strength of a company is in question if it has a high debt load. This is where DuPont analysis wins while picking the better stock.

Investors can simply do this analysis by taking a look at the company’s financials. However, looking at the financial statements of each company separately can be a tedious task. Here, screening tools like Zacks Research Wizard can come in handy.

For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/525934/5-duponttested-quality-stock-picks

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

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BMC Stock Holdings, Inc. (BMCH) : Free Stock Analysis Report
 
Universal Forest Products, Inc. (UFPI) : Free Stock Analysis Report
 
EMCOR Group, Inc. (EME) : Free Stock Analysis Report
 
NVR, Inc. (NVR) : Free Stock Analysis Report
 
MEDIFAST INC (MED) : Free Stock Analysis Report
 
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