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If you're interested in momentum ideas with long-term potential, this list might offer a good starting point.

With these considerations in mind, we performed a DuPont analysis of the sources of profitability for S&P 500 stocks trading near 52-week highs.

We broke the ROE equation into three parts:

ROE

= (Net Profit/Equity)

= (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)

= (Net Profit margin)*(Asset turnover)*(Leverage ratio)

All of the stocks mentioned below have seen rising ROE values for the recent quarter, year-over-year. Then we wanted to analyze the sources of these returns, so we narrowed down the original universe to only focus on companies with the following characteristics:

- Decreasing leverage, i.e. decreasing Asset/Equity ratio

- Improving asset use efficiency (i.e. declining Sales/Assets ratio) and improving net profit margin (i.e. declining Net Income/Sales ratio)

Companies passing all requirements are thus experiencing increasing profits due to operations and not to increased use of leverage.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

What do you think of these names? Use this list as a starting-off point for you own analysis.

Sorted by the change in return on equity.

1. Motorola Solutions, Inc. (MSI): Provides business and mission critical communication products and services for enterprise and government customers worldwide. Market cap of $15.11B. The stock is currently trading at 2.37% below its 52-week high. MRQ Net Profit Margin increased to 6.08% from 5.77% year-over-year, Sales/Assets increased to 0.14 from 0.07, while Assets/Equity decreased to 2.42 from 2.48. The stock has gained 26.46% over the last year.

2. Chevron Corporation (CVX): Engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. Market cap of $211.71B. The stock is currently trading at 2.60% below its 52-week high. MRQ Net Profit Margin increased to 12.15% from 7.58% year-over-year, Sales/Assets increased to 0.32 from 0.28, while Assets/Equity decreased to 1.69 from 1.73. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.05%, current ratio at 1.64, and quick ratio at 1.45. The stock has had a couple of great days, gaining 6.66% over the last week.

3. TECO Energy, Inc. (TE): An electric and gas utility company, through its subsidiaries, engages in the generation, purchase, transmission, distribution, and sale of electric energy. Market cap of $4.07B. The stock is currently trading at 0.89% below its 52-week high. MRQ Net Profit Margin increased to 9.90% from 5.66% year-over-year, Sales/Assets increased to 0.12 from 0.12, while Assets/Equity decreased to 3.23 from 3.46. The stock has gained 10.3% over the last year.

4. Avalonbay Communities Inc. (AVB): Engages in the development, redevelopment, acquisition, ownership, and operation of multifamily communities in the United States. Market cap of $12.53B. The stock is currently trading at 5.07% below its 52-week high. MRQ Net Profit Margin increased to 17.85% from 10.93% year-over-year, Sales/Assets increased to 0.03 from 0.03, while Assets/Equity decreased to 2.05 from 2.33. The stock is a short squeeze candidate, with a short float at 10.44% (equivalent to 10.55 days of average volume). The stock has had a good month, gaining 10.36%.

5. Estee Lauder Companies Inc. (EL): Engages in the manufacture, marketing, and sale of skin care, makeup, fragrance, and hair care products worldwide. Market cap of $21.29B. The stock is currently trading at 7.54% below its 52-week high. MRQ Net Profit Margin increased to 11.25% from 9.14% year-over-year, Sales/Assets increased to 0.40 from 0.37, while Assets/Equity decreased to 2.48 from 2.66. The stock has gained 39.68% over the last year.

6. FMC Technologies, Inc. (FTI): Provides technology solutions for the energy industry and other industrial markets. Market cap of $12.49B. The stock is currently trading at 4.46% below its 52-week high. MRQ Net Profit Margin increased to 9.41% from 8.44% year-over-year, Sales/Assets increased to 0.32 from 0.27, while Assets/Equity decreased to 2.70 from 2.90. The stock is a short squeeze candidate, with a short float at 6.79% (equivalent to 5.79 days of average volume). The stock has had a couple of great days, gaining 10.01% over the last week.

7. Entergy Corporation (ETR): Operates as an integrated energy company in the United States. Market cap of $12.84B. The stock is currently trading at 1.51% below its 52-week high. MRQ Net Profit Margin increased to 18.64% from 14.94% year-over-year, Sales/Assets increased to 0.09 from 0.09, while Assets/Equity decreased to 4.22 from 4.28. Relatively low correlation to the market (beta = 0.56), which may be appealing to risk averse investors. The stock has gained 7.02% over the last year.

8. Torchmark Corp. (TMK): Provides individual life and supplemental health insurance products, and annuities to middle income households. Market cap of $4.38B. The stock is currently trading at 4.67% below its 52-week high. MRQ Net Profit Margin increased to 16.37% from 13.65% year-over-year, Sales/Assets increased to 0.05 from 0.05, while Assets/Equity decreased to 4.06 from 4.15. The stock has gained 7.26% over the last year.

9. Total System Services, Inc. (TSS): Provides electronic payment processing and other services to card-issuing and merchant acquiring institutions. Market cap of $3.95B. The stock is currently trading at 3.77% below its 52-week high. MRQ Net Profit Margin increased to 12.65% from 10.56% year-over-year, Sales/Assets increased to 0.25 from 0.23, while Assets/Equity decreased to 1.42 from 1.55. The stock has gained 31.39% over the last year.

10. Intuitive Surgical, Inc. (ISRG): Designs, manufactures, and markets da Vinci surgical systems for various surgical procedures, including urologic, gynecologic, cardiothoracic, general, and head and neck surgeries. Market cap of $17.46B. The stock is currently trading at 0.27% below its 52-week high. MRQ Net Profit Margin increased to 27.40% from 25.15% year-over-year, Sales/Assets increased to 0.16 from 0.15, while Assets/Equity decreased to 1.16 from 1.17. The stock has gained 70.15% over the last year.

11. Kraft Foods Inc. (KFT): Together with its subsidiaries, manufactures and markets packaged food products worldwide. Market cap of $65.92B. The stock is currently trading at 0.59% below its 52-week high. MRQ Net Profit Margin increased to 6.97% from 6.36% year-over-year, Sales/Assets increased to 0.14 from 0.13, while Assets/Equity decreased to 2.62 from 2.68. Relatively low correlation to the market (beta = 0.55), which may be appealing to risk averse investors. The stock has gained 21.22% over the last year.

12. Roper Industries Inc. (ROP): Designs, manufactures, and distributes medical and scientific imaging products and software, energy systems and controls, and industrial technology products and radio frequency (RF) products and services. Market cap of $8.44B. The stock is currently trading at 1.02% below its 52-week high. MRQ Net Profit Margin increased to 15.47% from 13.93% year-over-year, Sales/Assets increased to 0.14 from 0.12, while Assets/Equity decreased to 1.71 from 1.92. The stock has had a couple of great days, gaining 6.71% over the last week.

13. Mastercard Incorporated (MA): Provides transaction processing and related services to customers principally in support of their credit, deposit access, electronic cash and automated teller machine payment card programs, and travelers' cheque programs. Market cap of $47.12B. The stock is currently trading at 3.57% below its 52-week high. MRQ Net Profit Margin increased to 39.44% from 36.27% year-over-year, Sales/Assets increased to 0.19 from 0.17, while Assets/Equity decreased to 1.62 from 1.69. The stock has gained 70.44% over the last year.

14. Wisconsin Energy Corp. (WEC): Engages in the generation, distribution, and sale of electric energy and steam. Market cap of $7.98B. The stock is currently trading at 0.12% below its 52-week high. MRQ Net Profit Margin increased to 12.33% from 11.53% year-over-year, Sales/Assets increased to 0.08 from 0.08, while Assets/Equity decreased to 3.34 from 3.38. Relatively low correlation to the market (beta = 0.34), which may be appealing to risk averse investors. The stock has gained 20.83% over the last year.

15. Goodrich Corp. (GR): Supplies aerospace components, systems, and services primarily in the United States, Canada, Europe, and the Asia Pacific. Market cap of $15.41B. The stock is currently trading at 0.19% below its 52-week high. MRQ Net Profit Margin increased to 9.89% from 9.16% year-over-year, Sales/Assets increased to 0.20 from 0.18, while Assets/Equity decreased to 2.70 from 2.93. The stock has gained 41.66% over the last year.

16. Union Pacific Corporation (UNP): Through its subsidiary, Union Pacific Railroad Company, provides rail transportation services in North America. Market cap of $50.35B. The stock is currently trading at 2.27% below its 52-week high. MRQ Net Profit Margin increased to 17.72% from 17.65% year-over-year, Sales/Assets increased to 0.11 from 0.10, while Assets/Equity decreased to 2.43 from 2.47. The stock has had a couple of great days, gaining 5.5% over the last week.

17. Visa, Inc. (V): Operates retail electronic payments network worldwide. Market cap of $81.82B. The stock is currently trading at 0.95% below its 52-week high. MRQ Net Profit Margin increased to 36.93% from 36.56% year-over-year, Sales/Assets increased to 0.07 from 0.06, while Assets/Equity decreased to 1.31 from 1.34. Relatively low correlation to the market (beta = 0.75), which may be appealing to risk averse investors. The stock has had a good month, gaining 10.68%.

18. DTE Energy Co. (DTE): Operates as an electric and natural gas utility company in Michigan. Market cap of $9.18B. The stock is currently trading at 0.31% below its 52-week high. MRQ Net Profit Margin increased to 8.08% from 7.62% year-over-year, Sales/Assets increased to 0.09 from 0.09, while Assets/Equity decreased to 3.56 from 3.65. Relatively low correlation to the market (beta = 0.63), which may be appealing to risk averse investors. The stock has had a couple of great days, gaining 5.24% over the last week.

19. Ross Stores Inc. (ROST): Operates off-price retail apparel and home accessories stores under the Ross Dress for Less and dd's DISCOUNTS brand names in the United States. Market cap of $5.68B. The stock is currently trading at 1.02% below its 52-week high. MRQ Net Profit Margin increased to 7.04% from 6.48% year-over-year, Sales/Assets increased to 0.64 from 0.63, while Assets/Equity decreased to 2.20 from 2.31. Relatively low correlation to the market (beta = 0.69), which may be appealing to risk averse investors. The stock has had a good month, gaining 10.61%.

20. Whole Foods Market, Inc. (WFM): Engages in the ownership and operation of natural and organic food supermarkets. Market cap of $12.29B. The stock is currently trading at 8.05% below its 52-week high. MRQ Net Profit Margin increased to 3.21% from 2.74% year-over-year, Sales/Assets increased to 0.55 from 0.53, while Assets/Equity decreased to 1.43 from 1.68. The stock has gained 35.81% over the last year.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

Source: 20 Top Performing S&P 500 Stocks With Bullish Profit Trends