Return on Equity (ROE) is a financial metric that is calculated by taking a company’s net income and dividing it by its shareholders’ equity. It’s a common metric used by financial analysts to measure a company’s ability to generate profit for its shareholders. It is largely guided by various factors of a business, such as asset turnover, profitability margins, as well as its interest and tax burdens. Obviously a higher return is desired, but with average ROEs ranging between negative values to the low 20s, the companies on our list today have an ROE well above 30%.
Avante Logixx Inc. (TSXV: XX) – $0.38
Business Support Services
Avante Logixx Inc. is a Canada-based security company operating through its subsidiaries, which enables personal and commercial security & safety, security monitoring, advanced video analytics, automation, and smart real time monitoring in various sectors via its SmartBoxx technology. The SmartBoxx platform provides functionality for applications in both security and other market verticals including energy efficiency and management, remote monitoring in various industry applications, home comfort, and automation. The Company’s security services are personal and residential, commercial, intelligent perimeter protection video analytics, security system and camera integration.
- Market Cap: $30,943,860
- Revenues (LTM): $9,387,030
- ROE: 43%
- P/Book: 3.1x
Cipher Pharmaceuticals Inc. (TSX: CPH) – $12.28
Pharmaceuticals
Cipher Pharmaceuticals Inc. is a specialty pharmaceutical company focused on dermatology. The Company acquires products that fulfill medical needs, manages the required clinical development and regulatory approval process, and markets those products either directly or through partners. The Company’s dermatology products include Sitavig, Absorica, Epuris, Beteflam, Dermadexin, Pruridexin, Ozenoxacin, CF101, ASF-1096 and Nanolipolee-007. The Company’s other products include Lipofen, Conzip and Durela.
- Market Cap: $319,241,877
- Revenues (LTM): $33,592,000
- ROE: 36%
- P/Book: 4.7x
Trimac Transportation Ltd. (TSX: TMA) – $6.15
Ground Freight & Logistics
Trimac Transportation Ltd. is a Canada-based Company, engaged in the provision of bulk trucking, repairs, maintenance and washrack services in Canada, as well as logistics services to the transportation industry in Canada and the United States. The Company operates business through three segments, which include bulk trucking operations, bulk plus logistics (BPL) and national tank services (NTS).
- Market Cap: $173,803,473
- Revenues (LTM): $438,359,000
- ROE: 33%
- P/Book: 3.4x
Holloway Lodging Corp. (TSX: HLC) – $5.95
Hotels, Motels & Cruise Lines
Holloway Lodging Corporation, formerly Holloway Lodging Real Estate Investment Trust, is an open-ended real estate investment trust. The Company owns and operates hotels across Canada and the United States and holds the master franchise rights for the Thriftlodge hotel brand in Canada. The Company is focused on acquiring, owning and operating select and limited service lodging properties and a small complement of service hotels, primarily in secondary, tertiary and suburban markets in Canada. The Company owns approximately 36 hotels with 4,250 rooms.
- Market Cap: $115,134,220
- Revenues (LTM): $110,663,000
- ROE: 31%
- P/Book: 0.9x
Automodular Corp. (TSX: AM) – $2.39
Auto, Truck & Motorcycle Parts
Automodular Corporation is a Canada-based sequencer and sub-assembler of components and modules that are installed in cars and trucks made by North American Original Equipment Manufacturers (OEMs). The Company’s products include instrument panel, rear suspension, front corner, front center suspension, front strut and bolster. Automodular Corporation also manufactures complex sub-assemblies such as cockpits, suspension units and powerpacks. Sequenced sub-assembled modules arrive at the OEM’s final assembly plant in the order of their final installation in the vehicle and are installed.
- Market Cap: $46,497,823
- Revenues (LTM): $85,761,000
- ROE: 30%
- P/Book: 0.9x
