I like to tilt my screens toward fast growing quality companies as growth is the number one driver for long-term shareholder returns.
I like those metrics as well, debt to equity is always nice to see if the business is overlevered. You can get an idea of this from the interest cover as well.
CAGR in revenue? If so, absolutely!
PB below 1 is very hard to come by in a quality business in my experience. The emergence of intangible assets also makes it harder to calculate the exact book value of a business (Its not just the physical assets that needs to be valued).
Dividend yield is not something I screen for. It is nice if the company pay a dividend, but I like companies that are able to reinvest its proceeds in the business. Dividends are also double taxed (once for the company's profits, and for you as an investor depending on your country/account type).
Low book value and high dividend yields is usually associated with "value" investing. I have nothing against value investing, but I prefer to invest in great businesses and not cheap ones.
Great article, but one thing not clear: Shares outstanding <2%
I believe you meant to say Shares Dilution <2% ?
Correct, Kevin. Thanks for the observation!
Can’t have stock price growth without internal growth…
thx
No problem, Dan!
These metrics fall mainly for growth stocks / companies, i believe?
How about:
- debt / equity ratio max 40%
- CAGR annual growth min 5%
- P/B below 1
- Dividend yield + 5%
Opinions? 😉
I like to tilt my screens toward fast growing quality companies as growth is the number one driver for long-term shareholder returns.
I like those metrics as well, debt to equity is always nice to see if the business is overlevered. You can get an idea of this from the interest cover as well.
CAGR in revenue? If so, absolutely!
PB below 1 is very hard to come by in a quality business in my experience. The emergence of intangible assets also makes it harder to calculate the exact book value of a business (Its not just the physical assets that needs to be valued).
Dividend yield is not something I screen for. It is nice if the company pay a dividend, but I like companies that are able to reinvest its proceeds in the business. Dividends are also double taxed (once for the company's profits, and for you as an investor depending on your country/account type).
Low book value and high dividend yields is usually associated with "value" investing. I have nothing against value investing, but I prefer to invest in great businesses and not cheap ones.
Thank you for a very insightful and detailed reply. You are correct and have good points, especially on dividend taxation.