Microsoft Corporation (MSFT): The Best Returns on Equity in the Dow Universe

Final foolish thoughts

Return on equity is an excellent tool for measuring how efficiently a company converts the money it receives from shareholders into profits. The best  5-year average return on equity figures in the DJIA belong to Boeing, International Business Machines Corp. (NYSE:IBM), and Microsoft Corporation (NASDAQ:MSFT). Those three companies are all fine examples of excellent businesses.

I would invest in all of them if the price was right. To me, Boeing seems too expensive right now relative to its ability to generate net income. Microsoft Corporation (NASDAQ:MSFT) has a rock solid balance sheet and has been buying back shares, but has made some questionable acquisitions in recent years.

My favorite company among these three is the one that had the best ROE in the TTM period. International Business Machines Corp. (NYSE:IBM) is utilizing data in ways that are improving this planet dramatically. Any company that can do that for a long period of time will likely produce some very happy, and wealthy, shareholders.

It’s incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies.

The article The Best Returns on Equity in the Dow Universe originally appeared on Fool.com.

Ryan Palmer has no position in any of the stocks mentioned. The Motley Fool owns shares of IBM. Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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