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What’s a good starting point when looking for companies that have a good moat?
Return on equity is one way to look at how much a company earns for each dollar of its equity capital. It’s not infallible, as no number is, but over a long period, it allows an investor to compare the prospects of any two companies, regardless of industry. Jensen Investment Management, a firm that focuses its investments on companies it perceives to be high quality, screens for companies with at least a 15% return on equity for 10 consecutive years.
That’s a high but not impossible bar. MarketWatch found 79 such companies within the S&P 500
SPX
and Nasdaq-100
NDX.
The list includes tech stalwarts such as Apple Inc.
AAPL,
along with discount retailers Costco Wholesale Corp.
COST,
and Target Corp.
TGT,
and apparel maker Nike Inc.
NKE,
| Ticker | Company | Sales (in millions of dollars) | Average ROE (%) |
| AAPL | Apple Inc. | 383,933.0 | 68.6 |
| UNH | UnitedHealth Group Incorporated | 359,982.0 | 22.3 |
| COST | Costco Wholesale Corporation | 242,290.0 | 23.5 |
| KR | Kroger Co. | 148,038.0 | 28.2 |
| VZ | Verizon Communications Inc. | 135,000.0 | 50.1 |
| TGT | Target Corporation | 108,008.0 | 26.6 |
| UPS | United Parcel Service, Inc. Class B | 95,859.0 | 198.8 |
| PEP | PepsiCo, Inc. | 91,616.0 | 49.8 |
| LMT | Lockheed Martin Corporation | 67,393.0 | 344.9 |
| ACN | Accenture Plc Class A | 64,111.8 | 45.9 |
| DE | Deere & Company | 61,353.0 | 29.7 |
| NKE | NIKE, Inc. Class B | 51,433.0 | 34.0 |
| BBY | Best Buy Co., Inc. | 44,372.0 | 36.1 |
| LYB | LyondellBasell Industries NV | 43,053.0 | 45.1 |
| GD | General Dynamics Corporation | 40,859.0 | 23.4 |
| DG | Dollar General Corporation | 38,806.8 | 27.9 |
| NOC | Northrop Grumman Corp. | 37,881.0 | 35.7 |
| MMM | 3M Company | 33,054.0 | 41.4 |
| V | Visa Inc. Class A | 31,831.0 | 29.5 |
| UNP | Union Pacific Corporation | 24,765.0 | 32.0 |
| MA | Mastercard Incorporated Class A | 23,596.0 | 92.2 |
| SHW | Sherwin-Williams Company | 22,960.9 | 62.2 |
| CDW | CDW Corporation | 22,383.0 | 59.9 |
| MMC | Marsh & McLennan Companies, Inc. | 21,580.0 | 24.0 |
| GIS | General Mills, Inc. | 20,281.3 | 29.3 |
| CHRW | C.H. Robinson Worldwide, Inc. | 20,115.7 | 41.3 |
| PH | Parker-Hannifin Corporation | 19,065.2 | 19.2 |
| TXN | Texas Instruments Incorporated | 18,821.0 | 45.0 |
| ADP | Automatic Data Processing, Inc. | 18,012.2 | 38.7 |
| EMR | Emerson Electric Co. | 16,439.0 | 24.1 |
| ITW | Illinois Tool Works Inc. | 16,075.0 | 53.5 |
| GWW | W.W. Grainger, Inc. | 16,017.0 | 39.4 |
| EL | Estee Lauder Companies Inc. Class A | 15,876.0 | 33.8 |
| K | Kellanova | 15,873.0 | 40.4 |
| TSCO | Tractor Supply Company | 14,761.1 | 36.8 |
| INTU | Intuit Inc. | 14,368.0 | 38.6 |
| OMC | Omnicom Group Inc | 14,364.8 | 41.4 |
| JBHT | J.B. Hunt Transport Services, Inc. | 13,850.1 | 30.4 |
| URI | United Rentals, Inc. | 13,186.0 | 32.7 |
| REGN | Regeneron Pharmaceuticals, Inc. | 12,670.8 | 26.8 |
| EXPD | Expeditors International of Washington, Inc. | 12,636.0 | 28.7 |
| APH | Amphenol Corporation Class A | 12,562.4 | 25.1 |
| HII | Huntington Ingalls Industries, Inc. | 10,899.0 | 30.8 |
| HSY | Hershey Company | 10,858.4 | 68.5 |
| KLAC | KLA Corporation | 10,464.2 | 63.2 |
| AMP | Ameriprise Financial, Inc. | 10,252.0 | 29.8 |
| NVR | NVR, Inc. | 9,781.1 | 36.2 |
| CPB | Campbell Soup Company | 9,357.0 | 43.6 |
| CTAS | Cintas Corporation | 8,991.6 | 27.2 |
| ROK | Rockwell Automation, Inc. | 8,616.3 | 52.1 |
| AVY | Avery Dennison Corporation | 8,498.5 | 32.3 |
| ZTS | Zoetis, Inc. Class A | 8,222.0 | 49.8 |
| CLX | Clorox Company | 7,389.0 | 1,233.6 |
| FAST | Fastenal Company | 7,283.7 | 30.2 |
| RHI | Robert Half Inc. | 6,916.3 | 35.5 |
| MNST | Monster Beverage Corporation | 6,691.1 | 26.4 |
| MKC | McCormick & Company, Incorporated | 6,605.1 | 22.7 |
| AME | AMETEK, Inc. | 6,420.7 | 17.4 |
| TROW | T. Rowe Price Group | 6,260.2 | 26.8 |
| BR | Broadridge Financial Solutions, Inc. | 6,060.9 | 33.4 |
| ODFL | Old Dominion Freight Line, Inc. | 5,950.7 | 23.0 |
| POOL | Pool Corporation | 5,775.4 | 67.9 |
| EW | Edwards Lifesciences Corporation | 5,657.1 | 26.0 |
| SPG | Simon Property Group, Inc. | 5,436.1 | 49.8 |
| ANET | Arista Networks, Inc. | 5,262.6 | 26.4 |
| PAYX | Paychex, Inc. | 5,086.9 | 41.7 |
| SNA | Snap-on Incorporated | 4,994.3 | 20.3 |
| PSA | Public Storage | 4,390.7 | 28.0 |
| BF.B | Brown-Forman Corporation Class B | 4,235.0 | 43.0 |
| RMD | ResMed Inc. | 4,223.0 | 20.6 |
| GNRC | Generac Holdings Inc. | 4,025.8 | 29.6 |
| MTD | Mettler-Toledo International Inc. | 3,954.4 | 188.3 |
| CPRT | Copart, Inc. | 3,869.5 | 30.0 |
| IEX | IDEX Corporation | 3,326.3 | 18.6 |
| ROL | Rollins, Inc. | 2,869.9 | 30.8 |
| VRSK | Verisk Analytics Inc | 2,301.8 | 45.9 |
| FDS | FactSet Research Systems Inc. | 2,085.5 | 46.7 |
| JKHY | Jack Henry & Associates, Inc. | 2,077.7 | 22.6 |
| MKTX | MarketAxess Holdings Inc. | 733.0 | 27.9 |
| Source: FactSet | |||
