Never forget the basics.
While we’re constantly bombarded with confusing investment mumbo jumbo, we should never forget that companies largely exist for one main reason: to take capital from investors and earn a return on it.
That’s why it makes sense for investors to look for businesses, with durable competitive advantages, that are able to consistently deliver high returns on capital.
As Berkshire Hathaway CEO Warren Buffett once said, “[T]he best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return.”
With that in mind, here are three companies with returns on invested capital above 15%.
Kicking things off is Home Depot, which consistently generates returns on invested capital around 30%.
Thanks to the home improvement giant’s massive economies of…