These days, success isn't just about working hard. It's more about working hard and efficiently. So why not apply that strategy to your investments?

To measure a company's efficiency, you can examine its return on equity (ROE): its profit margin, multiplied by its asset turnover, further multiplied by its financial leverage. ROE measures how efficiently the company employs its owners' capital -- your bang per buck as an investor. Take Philip Morris (NYSE: PM) or Accenture (NYSE: ACN), both of which boast ROEs of more than 50% -- a lot of concentrated bang.

Companies can juice their ROE by employing more debt, so it's important to consider a company's debt level when looking at ROE. All things being equal, though, the higher the ROE, the better: A higher ROE means a more efficient company, which in turn means a more effective executive team managing the business. You should consider companies like these for your portfolio.

To uncover some of the most efficient companies around, I ran a screen using The Motley Fool's CAPS screening tool. I looked for companies with:

  • CAPS ratings of four and the maximum five stars. Their high ratings make them more likely to outperform the market.
  • ROEs of 25% or greater.
  • Market caps of $500 million or greater, to keep us out of microcap land.       

Here are seven companies that I like:


Return on Equity (TTM)

Market Cap (in billions)

CAPS Rating
(out of 5)









AmeriGas Partners (NYSE: APU)




Coca-Cola (NYSE: KO)




Philip Morris




Unilever (NYSE: UL)




Verizon Communications (NYSE: VZ)




Data from Motley Fool CAPS. TTM = trailing 12 months.

While the stock screener is a great tool, it should only be the first step in your research. Examining other levers of specific companies, such as return on invested capital, liquidity, and debt-to-equity ratios, will also help you determine if a company is right for your portfolio. When you include those other metrics in your analysis, you'll get a fuller picture of whether that company is worth buying.

Start increasing the efficiency of your investments at Motley Fool CAPS today. Let the collective wisdom of our 165,000-member-strong community help you make better investing decisions.

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Fool contributor Jennifer Schonberger does not own shares of any of the companies mentioned in this article. You can follow her on Twitter. Accenture, Coca-Cola, and 3M are Motley Fool Inside Value recommendations. Philip Morris International and Unilever are Global Gains picks. Coca-Cola and Unilever are Income Investor recommendations. The Fool owns shares of Coca-Cola and has a disclosure policy.