ROE (return on equity): what it is and how to read it
ROE measures how much profit the company makes on each unit its shareholders have put in. A 15% ROE means it earns 15 a year for every 100 of equity.
How it is calculated
ROE = annual net income / shareholders' equity.
How to read it
Above 15% is considered high and often points to a business with an edge over competitors. Keeping it high for many years matters more than one exceptional year.
ROE in the MeridIAn ranking
Among the 2,023 companies in the ranking with data, the median ROE is 13.8%: half are below and half above. The lowest 25% are below 8.0% and the highest 25% above 22.7%.
For example: NVIDIA, 117.2%; Apple, 148.8%; Alphabet, 48.7%; Banco Santander, 13.1%.
By sector
| Sector | Median | Companies with data |
|---|---|---|
| Basic Materials | 11.3% | 140 |
| Communication Services | 14.2% | 94 |
| Consumer Cyclical | 16.0% | 211 |
| Consumer Defensive | 14.5% | 121 |
| Energy | 14.7% | 100 |
| Financial Services | 13.9% | 340 |
| Healthcare | 11.2% | 195 |
| Industrials | 16.9% | 373 |
| Real Estate | 8.0% | 96 |
| Technology | 17.0% | 261 |
| Utilities | 9.9% | 92 |
Highest ROE
What to watch out for
Debt inflates it: a heavily indebted company has little equity and a high ROE without being a better business. That is why you should look at it with debt/equity and ROIC. With negative equity, ROE is meaningless.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.