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High Quality Stocks

177 Companies Passing 5 Quality Gates.

Anish DasCurated by Anish Das
Refreshed Jun 8, 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
177
Avg ROE
29.11%
Avg ROIC
30.23%
Avg Gross Margin
57.95%
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.$567.33$34.34B186.5%81.4%43.4%
SEZL logoSEZL
Sezzle Inc.$116.01$3.9B103.3%52.7%85.4%
NVDA logoNVDA
NVIDIA Corporation$205.11$4.97T101.5%81.8%71.1%
MANH logoMANH
Manhattan Associates, Inc.$147.64$8.75B71.7%236.8%55.7%
MEDP logoMEDP
Medpace Holdings, Inc.$454.25$12.97B70.2%154.9%30.1%
IDXX logoIDXX
IDEXX Laboratories, Inc.$562.16$44.65B66.2%42.5%61.8%
AMP logoAMP
Ameriprise Financial, Inc.$454.66$43.78B60.5%31.3%50.4%
RRR logoRRR
Red Rock Resorts, Inc.$57.39$3.39B58.9%23.4%52.6%
LRCX logoLRCX
Lam Research Corporation$303.28$378.73B58.2%55.7%48.7%
PEGA logoPEGA
Pegasystems Inc.$34.71$5.87B57.3%27.2%75.9%
ADBE logoADBE
Adobe Inc.$251.44$103.84B55.4%51.4%88.6%
TMDX logoTMDX
TransMedics Group, Inc.$69.43$2.4B54.2%18.8%59.9%
V logoV
Visa Inc.$323.57$620.75B52.1%29.2%80.4%
WSM logoWSM
Williams-Sonoma, Inc.$204.98$24.14B51.5%44.3%46.2%
BKE logoBKE
The Buckle, Inc.$44.82$2.31B49.4%37.6%49%
ULTA logoULTA
Ulta Beauty, Inc.$467.07$20.08B43.6%28.1%39.1%
NFLX logoNFLX
Netflix, Inc.$82.18$348.22B42.8%29.8%48.5%
SCCO logoSCCO
Southern Copper Corporation$172.97$142.88B42.6%38.6%56.7%
VRT logoVRT
Vertiv Holdings Co$300.51$115.43B41.8%28.1%34.4%
IDCC logoIDCC
InterDigital, Inc.$260.64$6.71B41.5%40.9%80.3%
DECK logoDECK
Deckers Outdoor Corporation$108.13$15.02B40.9%100%56.1%
CTAS logoCTAS
Cintas Corporation$179.85$72.47B40.3%25.8%50%
MC logoMC
Moelis & Company$67.86$4.98B40.2%24.9%99.2%
UBER logoUBER
Uber Technologies, Inc.$70.71$146.47B39.8%13.6%39.8%
ADSK logoADSK
Autodesk, Inc.$229.96$48.55B39.7%37.8%91%
ALL logoALL
The Allstate Corporation$221.01$56.89B39.6%29.8%33.2%
ROL logoROL
Rollins, Inc.$47.10$22.7B38.9%23.5%49.4%
QLYS logoQLYS
Qualys, Inc.$109.90$3.87B38.2%47.5%82.8%
DUOL logoDUOL
Duolingo, Inc.$109.03$5.08B38.1%40.8%72.2%
APAM logoAPAM
Artisan Partners Asset Management Inc.$37.19$2.62B37.9%26.7%45.7%
UI logoUI
Ubiquiti Inc.
$567.33Price
Mkt Cap$34.34B
ROE186.5%
ROIC81.4%
Gross M43.4%
SEZL logoSEZL
Sezzle Inc.
$116.01Price
Mkt Cap$3.9B
ROE103.3%
ROIC52.7%
Gross M85.4%
NVDA logoNVDA
NVIDIA Corporation
$205.11Price
Mkt Cap$4.97T
ROE101.5%
ROIC81.8%
Gross M71.1%
MANH logoMANH
Manhattan Associates, Inc.
$147.64Price
Mkt Cap$8.75B
ROE71.7%
ROIC236.8%
Gross M55.7%
MEDP logoMEDP
Medpace Holdings, Inc.
$454.25Price
Mkt Cap$12.97B
ROE70.2%
ROIC154.9%
Gross M30.1%
IDXX logoIDXX
IDEXX Laboratories, Inc.
$562.16Price
Mkt Cap$44.65B
ROE66.2%
ROIC42.5%
Gross M61.8%
AMP logoAMP
Ameriprise Financial, Inc.
$454.66Price
Mkt Cap$43.78B
ROE60.5%
ROIC31.3%
Gross M50.4%
RRR logoRRR
Red Rock Resorts, Inc.
$57.39Price
Mkt Cap$3.39B
ROE58.9%
ROIC23.4%
Gross M52.6%
LRCX logoLRCX
Lam Research Corporation
$303.28Price
Mkt Cap$378.73B
ROE58.2%
ROIC55.7%
Gross M48.7%
PEGA logoPEGA
Pegasystems Inc.
$34.71Price
Mkt Cap$5.87B
ROE57.3%
ROIC27.2%
Gross M75.9%
ADBE logoADBE
Adobe Inc.
$251.44Price
Mkt Cap$103.84B
ROE55.4%
ROIC51.4%
Gross M88.6%
TMDX logoTMDX
TransMedics Group, Inc.
$69.43Price
Mkt Cap$2.4B
ROE54.2%
ROIC18.8%
Gross M59.9%
V logoV
Visa Inc.
$323.57Price
Mkt Cap$620.75B
ROE52.1%
ROIC29.2%
Gross M80.4%
WSM logoWSM
Williams-Sonoma, Inc.
$204.98Price
Mkt Cap$24.14B
ROE51.5%
ROIC44.3%
Gross M46.2%
BKE logoBKE
The Buckle, Inc.
$44.82Price
Mkt Cap$2.31B
ROE49.4%
ROIC37.6%
Gross M49%
ULTA logoULTA
Ulta Beauty, Inc.
$467.07Price
Mkt Cap$20.08B
ROE43.6%
ROIC28.1%
Gross M39.1%
NFLX logoNFLX
Netflix, Inc.
$82.18Price
Mkt Cap$348.22B
ROE42.8%
ROIC29.8%
Gross M48.5%
SCCO logoSCCO
Southern Copper Corporation
$172.97Price
Mkt Cap$142.88B
ROE42.6%
ROIC38.6%
Gross M56.7%
VRT logoVRT
Vertiv Holdings Co
$300.51Price
Mkt Cap$115.43B
ROE41.8%
ROIC28.1%
Gross M34.4%
IDCC logoIDCC
InterDigital, Inc.
$260.64Price
Mkt Cap$6.71B
ROE41.5%
ROIC40.9%
Gross M80.3%
DECK logoDECK
Deckers Outdoor Corporation
$108.13Price
Mkt Cap$15.02B
ROE40.9%
ROIC100%
Gross M56.1%
CTAS logoCTAS
Cintas Corporation
$179.85Price
Mkt Cap$72.47B
ROE40.3%
ROIC25.8%
Gross M50%
MC logoMC
Moelis & Company
$67.86Price
Mkt Cap$4.98B
ROE40.2%
ROIC24.9%
Gross M99.2%
UBER logoUBER
Uber Technologies, Inc.
$70.71Price
Mkt Cap$146.47B
ROE39.8%
ROIC13.6%
Gross M39.8%
ADSK logoADSK
Autodesk, Inc.
$229.96Price
Mkt Cap$48.55B
ROE39.7%
ROIC37.8%
Gross M91%
ALL logoALL
The Allstate Corporation
$221.01Price
Mkt Cap$56.89B
ROE39.6%
ROIC29.8%
Gross M33.2%
ROL logoROL
Rollins, Inc.
$47.10Price
Mkt Cap$22.7B
ROE38.9%
ROIC23.5%
Gross M49.4%
QLYS logoQLYS
Qualys, Inc.
$109.90Price
Mkt Cap$3.87B
ROE38.2%
ROIC47.5%
Gross M82.8%
DUOL logoDUOL
Duolingo, Inc.
$109.03Price
Mkt Cap$5.08B
ROE38.1%
ROIC40.8%
Gross M72.2%
APAM logoAPAM
Artisan Partners Asset Management Inc.
$37.19Price
Mkt Cap$2.62B
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?

Quality investing focuses on companies with high return on capital, robust balance sheets, and strong operating margins. This screen filters for firms with ROE above 15% and low leverage.

QUALITY
Core Strategy
Capital Return & Margin
ROE
Capital efficiency
ROE >= 15% Minimum
DEBT/EQ
Leverage Limit
Debt/Equity <= 0.8x
1

Require High ROE

Filter for Return on Equity (ROE) above 15% to verify efficient compounding of shareholder capital.

2

Audit Debt Leverage

Ensure the Debt-to-Equity ratio is under 0.8x to exclude highly leveraged firms.

3

Verify Cash Flow Generation

Confirm positive operating cash flows and strong operating margins to secure profitability.

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 Leads

  • ✓ Economic recessions and credit contractions due to low leverage and strong cash flows.
  • ✓ Periods of high interest rates where self-funding capacity is a competitive advantage.
  • ✓ Stable, long-term compounding horizons.

When Quality Trails

  • ✗ Highly speculative bull runs driven by unprofitable high-beta growth stocks.
  • ✗ Early economic recoveries when distressed cyclicals rally faster.
  • ✗ Liquidity-fueled market bubbles.

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 profit relative to shareholder equity. Target is above 15%.

Debt to Equity Multiplier

Gauges leverage. Low ratios imply lower financial risk and higher safety.

Operating Margin Percentage

Reflects operating profitability. High margins suggest economic moats.

1Y Total Return Percentage

Tracks price performance and market validation.

Risk Factors & Warning Signs to Track

The Quality Premium

High-quality companies rarely trade at cheap absolute valuations. Investors must prepare to pay a fair price for these compounders.

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

What is quality investing?
Quality investing is a strategy that focuses on buying companies with high return on capital, robust balance sheets, strong profit margins, and durable competitive moats.
Why is ROE the primary quality metric?
Return on Equity (ROE) measures how many dollars of profit a company generates with each dollar of shareholder equity, reflecting compounding efficiency.
How is quality different from value investing?
Value investing focuses on buying cheap stocks relative to assets or earnings, while quality investing focuses on buying great businesses with strong moats, even at a premium price.
What is Warren Buffett's view on quality?
Buffett shifted from deep value ('cigar butts') to quality, stating: 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.'
Do quality stocks pay dividends?
Many do, as their high capital efficiency generates excess free cash flow that can be distributed to shareholders or used for buybacks.
Why is low leverage vital for quality stocks?
High debt introduces interest rate and default risks, which can destroy equity value and interrupt corporate compounding during credit freezes.
What sectors contain the most quality stocks?
Technology (software), Consumer Staples, and Healthcare contain the most quality stocks due to their asset-light models and pricing power.
How do quality stocks perform in the long run?
Historically, quality stocks have generated significant long-term outperformance with lower downside risk, outperforming the market over full economic cycles.

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