The Business Quality Score (BQS) considers the company's growth, payout, profitability, and safety fundamentals.
These factors can help you find high-quality stocks with more stable earnings, stronger balance sheets, and higher profit margins. These stocks tend to outperform low-quality stocks over the long term. As investors, we want to buy high-quality stocks without paying too high a price.
Profitable companies have stable earnings, returning a significant portion of their profits to shareholders.
The BQS is one of the fundamental indicators used to determine the overall stock rating for our Ratings by TradeSmith program.
BQS considers the most critical characteristics of stocks likely to outperform the market, including:
- Growth in sales, profit, cash flow, and high returns on equity and assets
- Profitability compared to its history and compared to other stocks
- Safety: low debt, low risk, and low volatility
- Payout: How profits are used to enrich shareholders and grow the business
Our BQS ranks every stock from zero (lowest quality) to 100 (highest quality), showing you at a glance how any stock measures up.
Not all stocks will have a BQS.
They must meet the following criteria:
- U.S. traded common stocks and American Depositary Receipts (ADRs)
- Market Capitalization: > $100 million
- Volume: Average Daily Volume > $1 million
Here's a breakdown of the scores:
