These days, it's not all 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). This ratio is composed of a company's profit margin multiplied by its asset turnover, multiplied by its financial leverage. It measures how efficiently the company employs its owners' capital. In a nutshell, it essentially measures your bang per buck as an investor. Take Colgate-Palmolive (NYSE:CL), which rocks a whopping ROE of 83, as an example. Or look at IBM, which boasts an ROE of 43. The higher the ratio, the better -- a higher ratio means a more efficient company, and a more effective executive team when it comes to managing the business. It's these sorts of companies you should consider for your portfolio.

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

  • CAPS ratings of five stars, the highest ratings from our CAPS community.
  • ROEs of 25 or greater.
  • Market caps of $500 million or greater.

Since we began tracking our CAPS investment community in November 2006, five-star companies have outperformed the market with average annualized gains of 12%.

And voila:

Company

Market Capitalization

Return on Equity (TTM)

Accenture

$18.4B

66.6

Alliance Resource Partners (NASDAQ:ARLP)

$840.3M

46.2

Amerigas Partners

$1.5B

50.6

BHP Billiton (NYSE:BHP)

$102B

40.1

Core Laboratories

$1.4B

119

Corning (NYSE:GLW)

$13.3B

42.6

Foster Wheeler (NASDAQ:FWLT)

$3.1B

53.1

Highveld Steel & Vanadium

$580.7M

69.8

Philip Morris International (NYSE:PM)

$81B

51.8

Southern Copper (NYSE:PCU)

$11B

47.3

While the stock screener is a great tool, it should only be the first step in your investment research. Examining other levers of specific companies, such as return on invested capital, liquidity, and debt-to-equity ratio, will also help you determine if a company is right for your portfolio.

Start increasing the efficiency of your investments at Motley Fool CAPS today. Let the collective wisdom of our 120,000-member-strong investment community help you make better investing decisions.

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Jennifer Schonberger does not own shares of any of the companies mentioned in this article. The Motley Fool has a disclosure policy.

Alliance Resource Partners is a Motley Fool Income Investor pick. Accenture is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.