Five High-ROE Stocks Including Banco Bilbao Viscaya to Capitalize on Market Strength

Markets have demonstrated resilience in the face of economic uncertainties, with tech stocks leading a broader rally fueled by strong earnings results and accelerating AI monetization. While interest rates remain stable and unemployment shows signs of stabilization, investors seeking quality opportunities can turn to companies with superior capital efficiency metrics. Return on equity (ROE) has emerged as a critical screening criterion for identifying stocks that deliver attractive risk-adjusted returns while effectively deploying shareholder capital.

Arista Networks, Corning Inc., Banco Bilbao Viscaya Argentaria, The TJX Companies, and TE Connectivity stand out as five compelling picks characterized by high ROE and strong operational momentum. These companies have demonstrated their ability to generate superior returns on invested capital while navigating a dynamic market environment.

Understanding Return on Equity as an Investment Filter

Return on Equity—calculated as Net Income divided by Shareholders’ Equity—serves as a powerful tool for distinguishing genuinely profitable enterprises from those merely reporting surface-level gains. This metric reveals management’s efficiency in converting shareholder capital into earnings and provides insight into a company’s financial health.

The appeal of ROE-focused investing lies in its comparative utility. By comparing a company’s ROE against industry peers, investors can identify which firms are multiplying profits most effectively without requiring continuous equity injections. A consistently high ROE signals that management is reinvesting cash flows at attractive rates of return, a hallmark of sustainable value creation.

Why Market Conditions Favor High-ROE Equities

In periods of economic strength coupled with policy uncertainty—such as the current environment with interest rate stability—investors benefit from rotating toward “cash cow” stocks that generate reliable returns. Rather than chasing speculative growth stories, companies with proven ability to convert capital into profits offer both stability and upside potential. High-ROE equities fill this niche by combining growth characteristics with operational efficiency.

The Five Stocks: A Closer Look

Arista Networks (ANET) holds a commanding position in cloud networking infrastructure. Based in Santa Clara, the company specializes in high-speed Ethernet switching for data centers, with expanding market share in 200- and 400-gig products. The company projects long-term earnings growth of 20.1% and delivered a trailing four-quarter earnings surprise of 10.2% on average. Arista carries a Zacks Rank of 2.

Corning Inc. (GLW) has evolved from its glass manufacturing roots into a technology powerhouse focused on advanced substrates serving multiple industries. With long-term earnings growth expectations of 18.8% and a trailing four-quarter earnings surprise of 4.4%, Corning demonstrates steady operational performance. The company also carries a Zacks Rank of 2.

Banco Bilbao Viscaya Argentaria (BBVA), headquartered in Spain, provides comprehensive financial services spanning retail banking, wholesale banking, and asset management across Europe, the Americas, and Asia. The company projects 12% long-term earnings growth with a 5.7% average trailing four-quarter earnings surprise. Banco Bilbao Viscaya maintains a Zacks Rank of 1 and scores a B on the VGM assessment scale.

The TJX Companies (TJX) operates as a leading off-price retailer with a differentiated business model centered on opportunistic buying and inventory flexibility. Based in Framingham, the company serves diverse consumer segments through value-oriented assortments. TJX projects 10.2% long-term earnings growth and delivered a 5.5% trailing four-quarter earnings surprise. The company carries a Zacks Rank of 2.

TE Connectivity (TEL), operating from Galway with a presence in over 130 countries, designs and manufactures connectivity solutions for automotive, aerospace, defense, energy, and medical sectors. The company is positioned at the intersection of transformative trends including 5G adoption, electric vehicle proliferation, and industrial automation. TE Connectivity projects 12% long-term earnings growth with a 7.5% trailing four-quarter earnings surprise and maintains a Zacks Rank of 1 with an A-grade VGM Score.

Why These Five Stand Out

Each of these stocks meets rigorous screening criteria emphasizing return on equity while demonstrating concrete earnings momentum. The combination of favorable long-term growth prospects, positive recent earnings surprises, and strong Zacks rankings positions these equities to benefit from continued economic expansion.

While tariff-related uncertainties persist, the strength of these businesses and their operational track records provide investors with vehicles to participate in market gains through fundamentally sound companies rather than speculative positions. For those employing a disciplined, quality-focused approach to equity selection, these five stocks merit serious consideration.