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JD.com, Inc.'s (NASDAQ:JD) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?
It is hard to get excited after looking at (NASDAQ:JD) recent performance, when its stock has declined 2.2% over the past week. However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. In this article, we decided to focus on ROE. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. How Is ROE Calculated? Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for is: 16% = CN¥49b ÷ CN¥309b (Based on the trailing twelve months to March 2025). The 'return' is the profit over the last twelve months. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.16. Check out our latest analysis for Why Is ROE Important For Earnings Growth? We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. Earnings Growth And 16% ROE At first glance, seems to have a decent ROE. Even when compared to the industry average of 16% the company's ROE looks quite decent. Consequently, this likely laid the ground for the decent growth of 8.6% seen over the past five years by Next, on comparing with the industry net income growth, we found that reported growth was lower than the industry growth of 12% over the last few years, which is not something we like to see. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. If you're wondering about valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. Is Making Efficient Use Of Its Profits? has a healthy combination of a moderate three-year median payout ratio of 31% (or a retention ratio of 69%) and a respectable amount of growth in earnings as we saw above, meaning that the company has been making efficient use of its profits. While has been growing its earnings, it only recently started to pay dividends which likely means that the company decided to impress new and existing shareholders with a dividend. Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to drop to 22% over the next three years. However, the company's ROE is not expected to change by much despite the lower expected payout ratio. Summary Overall, we are quite pleased with performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see a good amount of growth in its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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3 stock picks for second half of 2025
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Coca-Cola's (KO) Timeless Appeal Among the Dogs of the Dow
The Coca-Cola Company (NYSE:KO) is included among the 11 Dogs of the Dow Dividend Stocks to Buy Now. A row of factory workers assembling bottles of sparkling soft drinks on a conveyor belt. The stock has surged by nearly 12% since the start of 2025, outperforming the broader market. Investors have shown strong interest in the stock this year for a number of reasons. It's often seen as a safe choice during market downturns because of its stability, making it a popular pick when uncertainty rises. More recently, confidence in The Coca-Cola Company (NYSE:KO) has been boosted by its strong position against potential tariff impacts. In addition, the company reported strong earnings in the second quarter of 2025. Its revenue came in at $12.6 billion, up 1% from the same period last year. The revenue beat analysts' estimates by $42 million. Operating income rose by 63%, while on a comparable currency-neutral basis (non-GAAP), it saw a 15% increase. The Coca-Cola Company (NYSE:KO) also remains investors' favorite because the company has been growing its payouts for 63 consecutive years. The company pays a quarterly dividend of $0.51 per share and has a dividend yield of 2.95%, as of July 26. While we acknowledge the potential of KO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
