These five ‘hold-forever’ stocks offer high returns on equity and capital employed

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Subscribe to enjoy similar stories. When it comes to investing for the long term, identifying stocks that consistently deliver a high return on equity (ROE) and return on capital employed (ROCE) can be a powerful strategy. ROE and ROCE are key financial metrics that measure a company's ability to generate profits from its capital, helping investors assess how efficiently a company is using its resources to grow.

A high ROE and ROCE typically signal a strong competitive position, effective management, and the potential for sustainable profits over time. A high ROCE indicates that a company makes a sizable profit on every penny invested into the business. Generally, companies that operate in traditionally defensive sectors such as consumer staples, information technology and insurance offer a high ROCE.

Such companies are generally less affected by changes in economic growth as they deal in essential products and services that have almost no correlation to economic swings. These companies not only excel in using their capital to generate robust returns but also operate in sectors with favourable growth trends, making them attractive investment opportunities. Today we will explore five stocks with high ROE and ROCE that are well-positioned for long-term growth.

Nestle India Limited is a subsidiary of a Swiss multinational corporation Nestle.. It is among the top two players in most of its product categories, including milk products and nutrition, beverages, prepared dishes and cooking aids, and chocolate and confectionery. Nestle owns brands such as Nescafe, Maggi, Milkybar, Kitkat, Bar-One, Milkmaid and Nestea.