SRV Return on Equity and Dividend Yield is Excellent

The Return on Equity (ROE) ratio shows the return being generated for every dollar of equity on the balance sheet. It varies by industry but ROEs of 15% or over are usually considered desirable. High ROE numbers sustained over the long term may indicate a company has a 'sustainable competitive advantage'. Such companies tend to sell at higher valuation multiples.

ServeCorp has an ROE of 15.4%, which is excellent.

The impact of leverage is one of the disadvantages of focusing on ROEs as it can skew ROE upwards - an alternative is to look at Return on Capital (ROC) Employed. But then again ROC of SRV is gain great at 12%.

SRV is therefore a quality and value company even though it has lost some of its current momentum evident by the drop in its share price.

It has a 13.6 12 month forecast rolling PE and with a great Dividend Yield of 4.73% to me this is a bargain BUY at current low price for this stock.