The Financial Post reports in its Saturday edition that oligopolies are an underappreciated segment of the Canadian stock market that have generated excellent returns. Guest columnist Robert Gill writes that cosy oligopolies lead to higher profits than industries that are considerably more fragmented. Return on equity (ROE) is a good proxy for profitability. The long-term average ROE is 12 per cent for the S&P/TSX Composite Index and 14 per cent for the S&P 500. Over the past decade, Canadian bank, telco and grocer profitability has exceeded their U.S. peers, which is directly attributable to higher industry concentration. Canadian banks returned a 10-year average ROE of 13.3 per cent over the past decade. This compares favourably with the U.S. banking return of 9.2 per cent. The trend remains convincing for telcos. Canadian telecoms returned 20 per cent over the past decade, trouncing the U.S. industry's more muted 14.7 per cent. The result was less glaring for grocers, but nevertheless remained consistent, with a 14.6-per-cent ROE for Canadian grocers versus 13.8 per cent south of the border. Canadian banks, telcos and airlines have all resoundingly outperformed their U.S. counterparts over the past 30 years.