The markets are excessively dependable on the eurozone problems. S&P put 15 Euro countries on review for possible downgrades. Unless Europe is put back on track, there will be fluctuations for a long time. In order to minimize the risks, I believe investors need to pick stocks with trustworthy numbers, strong field performance and consistent dividends. Therefore, I have mostly taken ROE into account in this article, which is one of the solid indicators regarding a company’s profitability.

ROE, or return on equity, as defined on Investopedia is:

Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Return on Equity is calculated as:

**Return on Equity = Net Income/Shareholder's Equity**

This indicator is particularly useful when comparing a company’s profitability to that of another in its industry. I have found four dividend stocks that have trustworthy return on equity numbers, and are priced with low P/E ratios. Moreover, analysts agree that these stocks will have positive EPS numbers in the next five years. Here, is a fundamental analysis on the four dividend stocks with big return on equity *(Data from Finviz/ Morningstar, and current as of December 6. You can download you O-Metrix calculator, here.):*

**Southern Copper (SCCO)**

Southern Copper is among the Top 5 dividend metal & mining stocks, as surveyed by Dividend Channel. The company has a P/E ratio of 11.6, and a forward P/E ratio of 11.0. Estimated annual EPS growth for the next five years is 15.15%. With a profit margin of 34.5%, and a dividend of 8.97%, Southern Copper is a breathtaking stock for dividend lovers.

Southern Copper is one of the best stocks in the basic materials sector, which has been a consistent profit maker for a considerable time. The company got hammered in the recession, and the deep value since October still exists. ROE is 57.39%, whereas insiders own 80.08% of the shares. Yields seem all right, as well as revenue and assets. Moreover, PEG value is 0.7. Based on these numbers, the stock has a remarkable O-Metrix score of 10.67. Most of the downside potential comes from the copper prices, but upside potential overweighs in my opinion. If you want to play this name, you’re still not late.

**Lockheed Martin (LMT)**

Lockheed is building a new batch of planes in an agreement with Pentagon. Lockheed Martin has also received two other contracts from the U.S. Armed Forces, totaling $30.6 million. The company shows a low P/E ratio of 9.6, and a forward P/E ratio of 10.0. Analysts expect the company to have a 7.3% annualized EPS growth in the next five years. It boasts a 5.12% dividend, while the profit margin is 6.3%.

Beta value is 0.90, and debt-to equity ratio (2.2) is lower than the industry average of 2.8. The company has an appetizing ROE of 86.90%, and a B Grade O-Metrix score of 6.33. Earnings per share (ttm) is doing significantly good, which had a 37.4% increase since January 2007. Lockheed Martin is in a much better condition than that of in September 2007, when it had double-digit P/E ratios of around 16. Buy this stock after a pullback.

**Avon Products (AVP)**

Avon is suffering from missed third quarter expectations. Avon shows a single-digit P/E ratio of 9.9, and a lower forward P/E ratio of 8.9. Five-year annual EPS growth forecast is 11.0%. Shareholders enjoyed a 5.41% dividend last year, while the profit margin is 6.5%.

The downward pressure on the stock might last for some time. Avon is at its 52-week low, so it will bounce back as soon as investors regain their confidence. Return-on-equity ratio is 44.54%, and PEG value is 0.8. The vast upside potential cannot be ignored, as well as stable dividends. There’s almost no downside potential left, except for the spill-over affect from the panic sell-off. It is time to consider adding this stock to your portfolio. Avon has a higher-than-average O-Metrix score of 8.72.

**H&R Block (HRB)**

H&R Block is having a sharp fall due to its quarterly reports. The Missouri-based company is trading at a P/E ratio of 12.2, and a forward P/E ratio of 8.5. Analysts estimate an 11.0% annual EPS growth for the next five years. It pays a 4.03% dividend, and the profit margin (9.6%) is higher than the industry average of 6.7%.

With a Beta value of 0.66, H&R Block is the least volatile company in its industry. ROE is 32.02%, and insider transactions have increased by 73% in the last six months. Debt-to equity ratio (0.8) is also significant, way below the industry average of 2.2. Standpoint Research and Oppenheimer recently upgraded its take on H&R Block. On the other hand, revenue and cash flow are unstable, along with assets. If you accept the risks of H&R Block, then this is a great buy for you.

**Disclosure: **I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.