With US 10Y bond yields near multi month highs, investors are being reminded how quickly borrowing costs can reset and pressure weaker balance sheets. Companies with high return on equity and robust finances can be better placed when funding becomes more expensive. This article focuses on that theme and highlights three stocks from the Solid Balance Sheet and Fundamentals screener that offer a clean way to focus on quality.
The three stocks below are just a starting sample. The full screen surfaced 16 more companies with equally compelling quality and balance sheet stories that are not covered here.
Identify and analyze those higher conviction opportunities directly in the Solid Balance Sheet and Fundamentals screener.
Fonix (AIM:FNX)
Overview: Fonix is a London based fintech company that helps media, charity, gaming and e-mobility clients collect payments through mobile carrier billing, SMS and voice billing. It uses its payment APIs, checkout tools and messaging services to generate recurring transaction revenue that supports high return on equity.
Operations: Fonix generates about £76 million in revenue from facilitating mobile payments and messaging, with roughly £62 million from the United Kingdom and £14 million from the rest of Europe.
Market Cap: £165 million
Investors looking for quality tied to real transaction flows may find Fonix interesting because its carrier billing and mobile payment platform supports recurring revenue and very high reported return on equity, backed by solid profit margins. The stock has traded below some cash flow based value estimates. This can be appealing when earnings growth has been resilient. However, the business relies fully on higher risk external borrowing rather than customer deposits, so funding conditions matter more here than for many other payment providers. Upcoming 2026 results will give you a clearer read on how sustainable this earnings profile is and whether the market is fully recognising the strength of the core payments engine.
Fonix’s high return on equity and recurring payment flows raise an obvious question. Is the market fully pricing that quality while funding stays more expensive? Walk through the DCF valuation analysis for Fonix to see what the cash flows might be missing.
Build your own high quality, high ROE shortlist
Fonix and the two other stocks in this article all came from a single Simply Wall St screener, which shows how powerful targeted filters can be when you focus on quality balance sheets and strong returns. Use our flexible Screener to combine valuation, growth, risk and dividend criteria into your own watchlist, or lean on any of our ready made Investing Ideas for a curated starting point.
Rightmove (LSE:RMV)
Overview: Rightmove runs the leading online property portal in the UK, where estate agents, lettings agents and new home developers pay to advertise homes to a large, engaged audience. Its Agency segment, which sells recurring subscription and listing packages to property professionals, is the key link to the Solid Balance Sheet and Fundamentals screener theme because it generates high margin, predictable revenue that supports strong return on equity.
Operations: Rightmove generates most of its revenue from the Estate Agency segment at about £318 million, with £76 million from New Homes and £45 million from Other activities such as commercial, overseas and data or mortgage services.
Market Cap: £3.8b
Rightmove offers focused exposure to digital property search, with its Agency segment generating high margin, recurring subscription income that supports reported ROE close to 300% and net margins around 50%. Earnings have increased, recent H1 2026 results show further revenue and EPS progress, and a new share buyback plus a slightly higher interim dividend indicate ongoing cash generation. At the same time, the company relies on higher risk external borrowing and has an unstable dividend history, and it remains heavily exposed to the UK housing cycle and aggressive portal competitors. Investors seeking quality fundamentals with clear but manageable risks may find Rightmove worth a closer look.
Rightmove’s very high ROE and thick margins can look like a simple quality story, yet the UK housing cycle and portal competition may be pulling in a different direction. For a detailed assessment, see the analysis report for Rightmove
Foresight Group Holdings (LSE:FSG)
Overview: Foresight Group Holdings is a London based asset manager that focuses on infrastructure funds owning renewable energy projects, energy management solutions and other real assets, alongside smaller private equity and venture capital strategies for institutional and retail investors. The managed infrastructure and real assets franchise is the main link to the Solid Balance Sheet and Fundamentals screener theme. It is built around long term, cash generative projects that support high return on equity and balance sheet resilience, with the more traditional private equity activity playing a secondary role in the overall mix.
Operations: Foresight Group Holdings generates about £164.9 million in revenue, with roughly £114.8 million from Real Assets and £50.1 million from Private Equity across the United Kingdom, Australia and several European markets.
Market Cap: £545 million
Foresight Group Holdings may merit a closer look if you want exposure to renewable energy and infrastructure projects that are already generating cash, rather than early stage concepts. The Real Assets segment anchors this, with net profit margins and return on equity supported by long term contracts and fee income. Ongoing buybacks and regular fund launches indicate disciplined capital use and growing assets under management. The flip side is reliance on performance fees, higher risk external funding and concentrated exposure to UK and European policy frameworks, which could pressure earnings if fundraising or regulation becomes less favourable. For investors who can accept those trade offs, the full story behind Foresight’s ROE profile may be worth exploring in more detail.
Foresight Group Holdings combines long term infrastructure cash flows with higher risk performance fees, which can obscure what is really driving the ROE profile. The full picture is available in the analysis report for Foresight Group Holdings
Seeking Fresh Alternatives Before Others Do
Fresh ideas do not stay under the radar for long. The moment momentum builds, entry points can start flying away. Scan these potential breakouts before the crowd and act now.
- Spot strong cash generators before momentum headlines catch them by reviewing the 9 high quality undervalued stocks curated for quality businesses with support from cash flow and fundamentals.
- Track early movers in the energy transition by checking the 92 nuclear energy infrastructure stocks focused on infrastructure stocks with potential exposure to long dated power demand.
- Zero in on industrials riding automation trends while they are still under the radar for now by scanning the 38 robotics and automation stocks hand picked for robotics and automation exposure.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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