QVI’s High-Quality Universe | Q2 2025
Using QVI's proprietary research checklist parameters, I screened for high-quality businesses. As expected, less than 1% made the cut.
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After running a screen to discover a potential stock pick for Quality Value Investing’s (QVI) next new idea, I decided to focus this series of posts on sharing the current wealth of enduring enterprises that emerged based on QVI’s checklist for quality business models.
Through its current wealth screening parameters, QVI has identified 78 enduring enterprises with high-quality business models. This result is down from 95 companies in the last update in December 2024. Note that some stocks were eliminated from the previous group following the addition of owners’ earnings to the screen.
The screening model intentionally excludes the QVI Real-Time Stock Picks, which are exclusive to premium and founding premium+ subscribers.
The selected companies fall within QVI’s circle of competence: Communications Services, Consumer Discretionary, Consumer Staples, Financials, Health Care, Industrials, Information Technology, and Materials.
No companies were screened from the Energy, Real Estate, and Utilities sectors, as these are outside QVI’s expertise. Due to high geopolitical downside risks, no Chinese companies are included in the selected sectors.
The quality-driven screen does not include valuation parameters. In future primary ticker posts, I will explore present value metrics for reasonable stock prices of select quality enterprises from the list below. Those that meet QVI’s current wealth and present value parameters will be eligible for initial coverage in the QVI Real-Time Stock Picks.
Current Wealth Quality Screener
Using the QVI research checklist to discover the companies’ current wealth, I screened for high-quality business models.
At the start of the screen, there were 10,257 publicly traded companies
Company Profile
Sectors: Communications Services, Consumer Discretionary, Consumer Staples, Financials, Health Care, Industrials, Information Technology, and Materials
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)
Company profile screen net results: 1,463 companies
Value Proposition
Morningstar Economic Moat: Wide or Narrow
Value Proposition Elevator Pitch: Are the company’s products or services understandable?
Value proposition screen net results: 538 companies
Returns on Management
Revenue Growth (5-Year Trailing): Must be positive
Net Profit Margin (MRFY): Must be profitable
Return on Equity (TTM): 15% or higher
Return on Invested Capital (TTM): 12% or higher
Cash Flow Per Share (TTM): Must be positive
Owners’ Earnings (5-Year EPS + Dividend Growth): 10% or higher
Returns on management net screen results: 112 companies
Enterprise Downside Risks
Debt to Equity (MRQ): Less than 1.00
Current Ratio (MRQ): Higher than 1.00, except for the consumer staples, financials, and healthcare sectors, as those companies have unique accounting situations that can negatively affect current ratios even for a high-quality enterprise
Enterprise downside risk net screening results: 78 companies
Basket of 78 High-Quality Business Models
Listed below are the 78 businesses that survived the current wealth screening parameters.
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