ROE index is the index of return on net assets, return on net assets = earnings per share ÷ net assets. In order to understand the overall operation of a listed company, investors can consider it from three aspects: the solvency of the company, the operational ability of the company and the profitability of the company, and ROE is an indicator to measure the profitability of the company.
Investors can analyze according to this standard. Generally speaking:
The average company has a ROE index of 10%- 15%;
ROE index in 15%-20% is an excellent company;
Excellent companies with a ROE index of 20%-30%. Therefore, the ROE must be at least greater than 15%, and the yield is not high if it is less than 15%.