As we continue to see volatility in financial markets, along with the prospect of several interest-rate hikes this year, it is especially important to focus on profitable companies. First, the company must be able to generate strong top-line growth and then it needs to control costs in order to translate revenue into higher bottom-line growth. There are also different accounting methods that may cause net income to be over- or understated.
I screened for return on equity because it is an important factor to assess the financial performance of a company that includes profitability, return on assets and leverage.
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