Three Stocks With Legitimately High Returns on Equity: Mastercard Inc (MA), Monster Beverage Corp (MNST), Fossil Inc (FOSL)

Earlier this year, consumer fashion company Fossil Inc (NASDAQ:FOSL) reported record fourth-quarter and fiscal 2012 results. During the quarter, net sales and earnings per share increased 14% and 34%, respectively. Earnings per share for the full year hit a record $5.59, rising 21% from the year before. Even better, the good times are expected to continue for Fossil Inc (NASDAQ:FOSL). Management expects first-quarter and full-year 2013 sales growth of 10%, and full-year diluted earnings per share are expected to be in a range of $5.85 to $6.15.

Fossil Inc (NASDAQ:FOSL) has a great balance sheet, with a long term debt-to-equity ratio of just 6% and more than twice as much cash and equivalents as long-term debt. In addition, the company’s return on equity was 27% last year, indicative of how efficiently the company is managed.

High returns on equity, and high returns for shareholders

These companies can take pride in their high returns on equity. They don’t have high ROEs just because of high levels of debt; rather, each of these companies has legitimately elevated profit generation from the financing shareholders have contributed.

Shareholders of these stocks should take pride in the extremely efficient and streamlined operations of each company. Each of these companies is conservatively capitalized, with very little debt on their respective balance sheets. These three stocks offer tremendous sales and profit growth without overburdening shareholders with debt. If you’re in the market for high-growth companies with sparkling clean balance sheets, start your research with these stocks.

The article Three Stocks With Legitimately High Returns on Equity originally appeared on Fool.com and is written by Robert Ciura.

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