QVI's High-Quality Business Model Universe | Summer 2024
Using our proprietary research checklist parameters, I screened for high-quality businesses. 1% of the investing universe made the cut.
Summary:
Quality Value Investing (QVI) has identified 90 potential enduring enterprises with high-quality business models through its current wealth screening parameters.
The 90 high-quality business models span different sectors and market capitalizations, representing 1% of the publicly traded investment universe.
The screened companies span our circle of competence sectors: Communications Services, Consumer Discretionary, Consumer Staples, Financials, Health Care, Industrials, and Information Technology.
In future posts, QVI will further explore the present value of selected stocks from the quality company screen.
After running a screen to discover a potential idea for Quality Value Investing’s (QVI) next new idea, I decided to focus this quarterly post series on sharing the current wealth of enduring enterprises that emerged based on QVI’s checklist for quality business models.
In future posts, I will further confirm the current wealth and explore the present value or attractive stock prices of selected quality enterprises from the list below in more detailed QVI Research Reports.
QVI Current Wealth Quality Screener
Using the QVI research checklist for the companies’ current wealth parameters, I screened for high-quality business models.
The beginning universe of publicly traded companies was 8,756.
Company Profile
Sectors: Communications Services, Consumer Discretionary, Consumer Staples, Financials, Health Care, Industrials, and Information Technology
Exchanges: NASDAQ and New York Stock Exchange [NYSE] (no over-the-counter or OTC issues)
Market Capitalization: Large Cap, Mid Cap, or Small Cap (no microcaps)
No companies were screened from the Energy, Materials, Real Estate, and Utilities sectors, as these are outside QVI’s circle of competence.
Company profile screen net results: 1,453 companies.
Value Proposition
Morningstar Economic Moat: Wide or Narrow
Value proposition screen net results: 516 companies.
Returns on Management
Revenue Growth [3-Year Trailing]: 3% or higher
Net Profit Margin [MRFY]: 5% or higher
Return on Equity [TTM]: 15% and higher
Return on Invested Capital [TTM]: 12% and higher
Return on Assets [MRFY]: 5% and higher
Cash Flow Per Share [TTM]: Must be positive
Returns on management net screen results: 119 companies.
Enterprise Downside Risks
Debt to Equity [MRQ]: Less than 80% or no debt
Current Ratio [MRQ]: Higher than 1.00 except for consumer staples and health care sectors
Eliminate Chinese companies in the selected sectors because of high geopolitical downside risks
Enterprise downside risk net screen results: 90 companies.
Basket of 90 High-Quality Business Models
The 90 businesses that survived the current wealth screening parameters are listed by sector.
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