After a rocky start to the month that led to a global market rout, two major inflation data seemed to have steadied the ship as the broader equity markets inched closer to all-time highs reached in mid-July. While the producer price index (a measure of wholesale prices) was up 0.1% last month, the consumer price index (a broad-based measure of prices for goods and services) increased 0.2%. This put the 12-month inflation rate at 2.9% — the lowest since March 2021. While the data gave an uncertain market some direction after the erratic movement last week, it also portrayed the resilience of the economy. This, in turn, led to optimism about a possible rate cut by the Federal Reserve next month, triggering an uptrend for the stocks. With a better-than-expected 2.8% annualized GDP growth in the second quarter and solid labor market conditions, it appeared that the economy was back on the growth track, cooling recessionary fears. As investors employ a wait-and-see approach in a classic example of "backing and filling" in the market, they can benefit from "cash cow" stocks that garner higher returns. However, identifying cash-rich stocks alone does not make for a solid investment proposition unless it is backed by attractive efficiency ratios like return on equity (ROE). A high ROE ensures that the company is reinvesting cash at a high rate of return. Upbound Group, Inc. (NASDAQ: UPBD), The AES Corporation (NYSE: AES), Arch Capital Group Ltd. (NASDAQ: ACGL), PulteGroup, Inc. (NYSE: PHM) and Banco de Chile (NYSE: BCH) are some of the stocks with high ROE to profit from. ROE: A Key Metric ROE = Net Income/Shareholders' Equity ROE helps investors distinguish profit-generating companies from profit burners and is useful in determining the financial health of a company. In other words, this financial metric enables investors to identify companies that diligently deploy cash for higher ...