With Middle East tensions still posing a threat to the Wall Street rally from time to time and the U.S. labor market weakening, concerns about an economic slowdown are often resurfacing. Hence, quality picks are necessary at this level.

In this regard, return on equity (ROE) is one of the most favored metrics of investors. It is a profitability ratio that measures earnings generated by a company from its equity. Investors can follow the ROE trend in companies and compare this to historical or industry benchmarks to pick a winning stock.

However, stepping beyond the basic ROE and analyzing it at an advanced level could lead to even better returns. Here is where the DuPont analysis comes into play. It is an…