Relationship between Financial Characteristics of Companies in Cement Industry and Their Stock Returns in Tehran Stock Exchange

The aim of investors for investment is gaining returns. To this end and for maximizing the return, investors seek for identifying factors effective on return so that they can use them for predicting their investment's return. In the current work, relationship between financial characteristics of the companies and stock return in Tehran Stock Exchange in 2004-2011 is investigated. Financial characteristics include firm size, return on equity (ROE), return on assets (ROA), price-earnings ratio , book – market equity ratio, profit margin, profitability and financial leverage. Panel data method was used for data analysis and the results showed that the variables of firm size, book- market equity ratio, return on assets, and return on equity are significantly related to stock returns, but no relationship was observed between margin profit, financial leverage, and priceearnings ratio with stock returns.