U.S.-listed stocks with strong growth and financial stability.
Today, we are focusing on a strategy that combines Trading Central’s factor ratings for quality and growth with key financial metrics to identify high-calibre stocks. This approach screens for companies with a debt-to-equity ratio below industry norms, a return on capital above 10 per cent and solid growth fundamentals.
By prioritizing quality, low leverage and strong returns, the strategy minimizes financial risk while targeting companies with the potential to deliver consistent price performance. Back-testing reveals that this disciplined methodology has historically outperformed the S&P 500 index, making it an excellent strategy for growth-focused investors who are seeking sustainable long-term results.
We used Trading Central’s Strategy Builder to identify U.S.-listed stocks with a combination of quality, growth and financial stability metrics.
We began by setting a minimum market capitalization of US$5-billion to ensure a focus on established, stable companies with low volatility.
Next, we filtered for stocks with a trailing 12-month return on capital of at least 10 per cent, targeting businesses that allocate capital efficiently to generate strong returns. To ensure financial stability, we included only companies with a debt-to-equity ratio of one or less, indicating conservative use of leverage.
For growth and quality, we focused on companies with Trading Central’s growth and quality factor ratings of at least 55 out of 100. These proprietary ratings highlight companies with strong earnings growth potential and robust operational fundamentals.
The screen also considered stocks with a maximum decline of 10 per cent from their 52-week high, ensuring that we identified companies that have maintained price resilience.
We have also included year-to-date and one-year price performance for your reference.
Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Its product suite provides actionable trading ideas based on technical and fundamental research covering stocks, exchange-traded funds, indexes, forex, options and commodities. Strategy Builder, our stock screener, is available through leading retail brokers in Canada and worldwide.
Nvidia Corp. NVDA-Q, a leader in the semi-conductor industry, renowned for its graphics processing units that power gaming, artificial intelligence and data centres, has delivered exceptional performance, with a return on capital of 102.9 per cent and strong Trading Central quality and growth ratings of 88 and 83 out of 100, respectively. The stock price is trading within 4 per cent of its record high on Jan. 7.
IES Holdings Inc. IESC-Q, a construction-focused company that specializes in electrical contracting and infrastructure services, stands out with a remarkable one-year return of 287.5 per cent and a return on capital of 33.7 per cent. Its Trading Central quality and growth ratings of 84 and 64 out of 100, respectively, combined with a low debt-to-equity ratio of 0.1, highlight its strong operational efficiency and financial stability.
Alphabet Inc. GOOGL-Q makes the list owing to its strong financial stability and efficient use of its resources. The company boasts a market cap of US$2.44-trillion and a low debt-to-equity ratio of just 0.09, underscoring its solid financial foundation. Its return on capital of 28.2 per cent highlights its ability to generate impressive returns. With Trading Central quality and growth ratings of 79 and 60, respectively, Alphabet demonstrates strong fundamentals and consistent growth potential. Despite a modest one-year performance of 33.4 per cent compared to others on the list, the company’s innovation in AI, cloud computing and advertising secures its leadership position in the tech industry.
Trading Central Strategy Builder provides a back-testing capability to evaluate how well an investing strategy would have worked in the past. Using a five-year historical period with quarterly rebalancing, the screen described outperformed the benchmark with a 23-per-cent total return compared to 13 per cent for the S&P 500.
The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Trading Central in respect of investing in financial instruments. Investors should conduct further research before investing.
Gary Christie is head of North American research at Trading Central in Ottawa.
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