In terms of ROA or return on assets, this is a ratio that many investors find to be useful. The ratio measure how well a company is managing its assets to turn profits, during a certain time period. Investors can use the ROA to determine how well the company turns its investments into assets to provide profits.
Thus, the figure shows the profitability of a company’s assets. The best ROA is found when one compares the ratio between companies of the same industry. Three stocks that are allocating their assets well right now are Gap Inc (NYSE:GPS), Vodafone Group Plc (ADR) (NASDAQ:VOD), and Gilead Sciences, Inc. (NASDAQ:GILD).
Gap Inc (NYSE:GPS) has had an ROA over the last 12 fiscal months of 16.34%, which is higher than the industry average of 8.01% (more than double). The sector average is at 7.60%. The stock rose by +0.54%, with an average going between $34.62 and $35.57. In the last day of trade, volume for shares traded was at 5.72 million.
Vodafone Group Plc (ADR) (NASDAQ:VOD) has an ROA over the past 12 months that is 4.80% above what the industry average is (as per Reuters data). This ratio averages out to be 3.24% for the industry and 11.56% for the sector. Downturn for the stock is -1.08%.
Gilead Sciences, Inc. (NASDAQ:GILD) has a 42.67% return on assets ratio over the past 12 months. That is way above the industry average of 12.10% and the sector average of 11.23%. The stock declined -0.83% and closed out at $115.61. It traded in recent session at 6.57 million shares, with a 52-week average being between $85.95 and $123.37. Its total market capitalization is $171.09 billion.
These are three stocks with a higher ROA than the industry averages. The ratio is not only helpful for investors but also for managers as a way to tell how well a company is turning its assets into profits over a certain timeline.