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High Quality Stocks

179 Companies Passing 5 Quality Gates.

Anish DasCurated by Anish Das
Refreshed Jun 21, 2026

Identify the highest quality companies in the market by requiring them to pass 5 simultaneous quality gates: Profitability, Capital Efficiency, Pricing Power, Cash Generation, and Debt Discipline.

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Screen VitalsLive Metrics
Companies
179
Avg ROE
29.07%
Avg ROIC
30.09%
Avg Gross Margin
58.03%
Equity Efficiency
ROE ≥ 15%
Capital Efficiency
ROIC ≥ 12%
Pricing Power
Gross Margin ≥ 30%
Debt Discipline
D/E ≤ 1
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Compare Top 3 Open Screener
TickerCompanyPriceMkt CapROEROICGross M
UI logoUI
Ubiquiti Inc.$589.46$35.68B186.5%81.4%43.4%
SEZL logoSEZL
Sezzle Inc.$163.28$5.49B103.3%52.7%85.4%
NVDA logoNVDA
NVIDIA Corporation$210.69$5.1T101.5%81.8%71.1%
MANH logoMANH
Manhattan Associates, Inc.$132.28$7.84B71.7%236.8%55.7%
MEDP logoMEDP
Medpace Holdings, Inc.$460.20$13.14B70.2%154.9%30.1%
IDXX logoIDXX
IDEXX Laboratories, Inc.$562.09$44.64B66.2%42.5%61.8%
AMP logoAMP
Ameriprise Financial, Inc.$467.43$45.01B60.5%31.3%50.4%
RRR logoRRR
Red Rock Resorts, Inc.$61.33$3.63B58.9%23.4%52.6%
LRCX logoLRCX
Lam Research Corporation$389.04$485.82B58.2%55.7%48.7%
PEGA logoPEGA
Pegasystems Inc.$30.09$5.09B57.3%27.2%75.9%
ADBE logoADBE
Adobe Inc.$195.16$77.58B55.4%51.4%88.6%
TMDX logoTMDX
TransMedics Group, Inc.$78.79$2.72B54.2%18.8%59.9%
V logoV
Visa Inc.$327.24$627.79B52.1%29.2%80.4%
WSM logoWSM
Williams-Sonoma, Inc.$226.92$26.72B51.5%44.3%46.2%
BKE logoBKE
The Buckle, Inc.$45.17$2.33B49.4%37.6%49%
ULTA logoULTA
Ulta Beauty, Inc.$456.13$19.61B43.6%28.1%39.1%
NFLX logoNFLX
Netflix, Inc.$77.38$327.88B42.8%29.8%48.5%
SCCO logoSCCO
Southern Copper Corporation$192.93$159.37B42.6%38.6%56.7%
VRT logoVRT
Vertiv Holdings Co$333.05$127.93B41.8%28.1%34.4%
IDCC logoIDCC
InterDigital, Inc.$296.04$7.62B41.5%40.9%80.3%
DECK logoDECK
Deckers Outdoor Corporation$109.11$15.15B40.9%100%56.1%
CTAS logoCTAS
Cintas Corporation$170.85$68.84B40.3%25.8%50%
MC logoMC
Moelis & Company$67.18$4.93B40.2%24.9%99.2%
UBER logoUBER
Uber Technologies, Inc.$71.64$148.39B39.8%13.6%39.8%
ADSK logoADSK
Autodesk, Inc.$193.82$40.92B39.7%37.8%91%
ALL logoALL
The Allstate Corporation$221.17$56.93B39.6%29.8%33.2%
ROL logoROL
Rollins, Inc.$44.96$21.67B38.9%23.5%49.4%
QLYS logoQLYS
Qualys, Inc.$111.30$3.92B38.2%47.5%82.8%
DUOL logoDUOL
Duolingo, Inc.$125.56$5.85B38.1%40.8%72.2%
APAM logoAPAM
Artisan Partners Asset Management Inc.$35.88$2.53B37.9%26.7%45.7%
UI logoUI
Ubiquiti Inc.
$589.46Price
Mkt Cap$35.68B
ROE186.5%
ROIC81.4%
Gross M43.4%
SEZL logoSEZL
Sezzle Inc.
$163.28Price
Mkt Cap$5.49B
ROE103.3%
ROIC52.7%
Gross M85.4%
NVDA logoNVDA
NVIDIA Corporation
$210.69Price
Mkt Cap$5.1T
ROE101.5%
ROIC81.8%
Gross M71.1%
MANH logoMANH
Manhattan Associates, Inc.
$132.28Price
Mkt Cap$7.84B
ROE71.7%
ROIC236.8%
Gross M55.7%
MEDP logoMEDP
Medpace Holdings, Inc.
$460.20Price
Mkt Cap$13.14B
ROE70.2%
ROIC154.9%
Gross M30.1%
IDXX logoIDXX
IDEXX Laboratories, Inc.
$562.09Price
Mkt Cap$44.64B
ROE66.2%
ROIC42.5%
Gross M61.8%
AMP logoAMP
Ameriprise Financial, Inc.
$467.43Price
Mkt Cap$45.01B
ROE60.5%
ROIC31.3%
Gross M50.4%
RRR logoRRR
Red Rock Resorts, Inc.
$61.33Price
Mkt Cap$3.63B
ROE58.9%
ROIC23.4%
Gross M52.6%
LRCX logoLRCX
Lam Research Corporation
$389.04Price
Mkt Cap$485.82B
ROE58.2%
ROIC55.7%
Gross M48.7%
PEGA logoPEGA
Pegasystems Inc.
$30.09Price
Mkt Cap$5.09B
ROE57.3%
ROIC27.2%
Gross M75.9%
ADBE logoADBE
Adobe Inc.
$195.16Price
Mkt Cap$77.58B
ROE55.4%
ROIC51.4%
Gross M88.6%
TMDX logoTMDX
TransMedics Group, Inc.
$78.79Price
Mkt Cap$2.72B
ROE54.2%
ROIC18.8%
Gross M59.9%
V logoV
Visa Inc.
$327.24Price
Mkt Cap$627.79B
ROE52.1%
ROIC29.2%
Gross M80.4%
WSM logoWSM
Williams-Sonoma, Inc.
$226.92Price
Mkt Cap$26.72B
ROE51.5%
ROIC44.3%
Gross M46.2%
BKE logoBKE
The Buckle, Inc.
$45.17Price
Mkt Cap$2.33B
ROE49.4%
ROIC37.6%
Gross M49%
ULTA logoULTA
Ulta Beauty, Inc.
$456.13Price
Mkt Cap$19.61B
ROE43.6%
ROIC28.1%
Gross M39.1%
NFLX logoNFLX
Netflix, Inc.
$77.38Price
Mkt Cap$327.88B
ROE42.8%
ROIC29.8%
Gross M48.5%
SCCO logoSCCO
Southern Copper Corporation
$192.93Price
Mkt Cap$159.37B
ROE42.6%
ROIC38.6%
Gross M56.7%
VRT logoVRT
Vertiv Holdings Co
$333.05Price
Mkt Cap$127.93B
ROE41.8%
ROIC28.1%
Gross M34.4%
IDCC logoIDCC
InterDigital, Inc.
$296.04Price
Mkt Cap$7.62B
ROE41.5%
ROIC40.9%
Gross M80.3%
DECK logoDECK
Deckers Outdoor Corporation
$109.11Price
Mkt Cap$15.15B
ROE40.9%
ROIC100%
Gross M56.1%
CTAS logoCTAS
Cintas Corporation
$170.85Price
Mkt Cap$68.84B
ROE40.3%
ROIC25.8%
Gross M50%
MC logoMC
Moelis & Company
$67.18Price
Mkt Cap$4.93B
ROE40.2%
ROIC24.9%
Gross M99.2%
UBER logoUBER
Uber Technologies, Inc.
$71.64Price
Mkt Cap$148.39B
ROE39.8%
ROIC13.6%
Gross M39.8%
ADSK logoADSK
Autodesk, Inc.
$193.82Price
Mkt Cap$40.92B
ROE39.7%
ROIC37.8%
Gross M91%
ALL logoALL
The Allstate Corporation
$221.17Price
Mkt Cap$56.93B
ROE39.6%
ROIC29.8%
Gross M33.2%
ROL logoROL
Rollins, Inc.
$44.96Price
Mkt Cap$21.67B
ROE38.9%
ROIC23.5%
Gross M49.4%
QLYS logoQLYS
Qualys, Inc.
$111.30Price
Mkt Cap$3.92B
ROE38.2%
ROIC47.5%
Gross M82.8%
DUOL logoDUOL
Duolingo, Inc.
$125.56Price
Mkt Cap$5.85B
ROE38.1%
ROIC40.8%
Gross M72.2%
APAM logoAPAM
Artisan Partners Asset Management Inc.
$35.88Price
Mkt Cap$2.53B
ROE37.9%
ROIC26.7%
Gross M45.7%
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Learn more about High Quality Stocks

How We Build This List

  • ROE ≥ 15% (Equity Profitability Gate)15% ROE is roughly 1.5× cost of equity — the threshold where management creates real shareholder value. Below this, capital destruction is likely after accounting for risk-adjusted required returns.
  • ROIC ≥ 12% (Capital Efficiency Gate)ROIC measures returns on all capital — debt plus equity — stripping out leverage effects. 12%+ ensures the business earns well above its weighted cost of capital regardless of capital structure.
  • Gross Margin ≥ 30% (Pricing Power / Moat Proxy)Companies with 30%+ gross margin charge premium prices because customers choose them — brand power, switching costs, or network effects. Below 30%, businesses compete primarily on cost and have fragile profitability.
  • FCF Margin ≥ 8% (Cash Generation Gate)Reported earnings can be engineered through accruals. Free cash flow margin ≥ 8% confirms the business actually generates cash — $8+ per $100 revenue after all capital expenditures.
  • Debt/Equity ≤ 1 (Leverage Discipline)Limits financial engineering. High ROE with high leverage is fragile; high ROE with contained debt reflects genuine business quality. D/E ≤ 1 keeps leverage reasonable without excluding companies that use modest debt productively.
  • Market Cap ≥ $2B (Established Scale)Quality metrics are most reliable at scale. $2B+ companies have survived downturns, faced competitive threats, and maintained quality through cycles — not just during favorable conditions.
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What Makes a Stock a High Quality Stocks constituent?

This screen identifies companies with durable competitive advantages by filtering for an ROE of at least 15% and a market cap exceeding $2 billion. These thresholds isolate firms like Microsoft, which maintained high profitability through the 2022 tech correction, proving that quality metrics act as a buffer during market volatility.

15% ROE
Profitability
ROE >= 15%
$2B CAP
Scale Filter
Market Cap >= $2B
QUALITY
Strategy Type
High Quality Focus
1

Filter for Profitability

We set ROE at 15% to ensure management generates value above the cost of capital, similar to how Visa consistently maintained ROE above 30% during the 2010s.

2

Establish Minimum Scale

The $2B market cap filter removes speculative micro-caps, ensuring the company has survived market cycles like the 2008 financial crisis.

3

Validate Business Moats

We look for companies with pricing power, such as Apple, which maintained high margins even during the supply chain disruptions of 2021.

Performance Dynamics: When Does This Strategy Outperform?

Strategy performance behaves differently based on market conditions. Let's analyze when this strategy outperforms and when it lags:

When Quality Outperforms

  • ✓ During the 2022 bear market, high-quality stocks outperformed the broader S&P 500 by roughly 8% as investors fled to safety.
  • ✓ In the 2000-2002 dot-com crash, companies with high ROE and low debt significantly outperformed speculative tech stocks.
  • ✓ During periods of rising inflation, firms with high margins like Costco historically maintained better price stability than low-margin peers.

When Quality Trails

  • ✗ In the 2020 post-COVID liquidity rally, speculative low-quality stocks surged, often outperforming high-quality names by 20% in a single quarter.
  • ✗ During rapid economic recoveries, high-beta, low-quality stocks often see larger price swings than stable, high-quality blue chips.
  • ✗ When interest rates are near zero, investors often ignore quality metrics in favor of high-growth, cash-burning companies.

How to Use the Screener Results Table

To build a resilient portfolio, do not buy stocks on simple statistics alone. Use the key columns in our table to audit the durability, safety, and returns of each stock:

Return on Equity (ROE) Percentage

Measures how efficiently management uses shareholder capital; Home Depot's high ROE reflects its dominance in home improvement.

Market Capitalization Currency

Ensures the company has reached institutional scale, unlike small-cap stocks that can be volatile and illiquid.

Gross Margin Percentage

Indicates pricing power; Coca-Cola's 60% margins show it can pass costs to consumers, unlike low-margin retailers.

Debt/Equity Ratio Ratio

Measures leverage; a ratio below 1.0 helped Johnson & Johnson maintain its AAA credit rating during the 2008 crisis.

Risk Factors & Warning Signs to Track

The Valuation Trap

High-quality stocks often trade at premium P/E multiples, which can lead to poor returns if bought at the wrong time. For example, Intel was considered a high-quality stock for decades but saw its stock price stagnate for years starting in 2000 due to overvaluation and shifting market dynamics.

What are High Quality Stocks?

Creates a multi-factor quality composite, requiring companies to be elite across ROE, ROIC, gross margin, cash flow, and debt leverage simultaneously.

  • ROE ≥ 15% (Equity Profitability)
  • ROIC ≥ 12% (Capital Efficiency)
  • Gross Margin ≥ 30% (Pricing Power)
  • FCF Margin ≥ 8% (Cash Generation)
  • Debt/Equity ≤ 1 (Financial Discipline)

Why Invest in High Quality Stocks?

Downside Protection

Limits drawdowns during market panics and recessions

Compounding Power

Compounds shareholder value efficiently over decades

Inflation Resistance

Focuses on businesses with durable pricing power

No Leverage Illusion

Ensures high returns are not driven by debt

Frequently Asked Questions

Why use a 15% ROE threshold?
15% is roughly 1.5x the long-term cost of equity, ensuring the company is creating real value rather than just breaking even.
Does this screen find growth stocks?
It finds profitable growth, like Alphabet, which has historically maintained high ROE while expanding its market share.
Why the $2B market cap floor?
Companies below $2B are often more susceptible to bankruptcy, as seen with many small-cap firms during the 2008 crash.
Can I use this for dividend investing?
Yes, high-quality companies like Procter & Gamble often use their excess cash to fund decades of dividend growth.
What if a company has high debt?
High debt can inflate ROE, creating a 'quality' illusion; our screen filters for companies that maintain quality without excessive leverage.
How often should I re-screen?
Quarterly is sufficient, as quality metrics like ROE rarely shift drastically in a single month, unlike volatile momentum stocks.
Are these stocks recession-proof?
No stock is recession-proof, but high-quality firms like Walmart historically show more resilience than cyclical firms during downturns.
Does this screen include tech stocks?
Yes, it captures tech leaders like Microsoft that meet the 15% ROE requirement through high-margin software sales.

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