Stock Valuation: Top 22 Metrics to Find Value Stocks


1. Brand. The business must possess a readily identifiable brand with favourable consumer perception.
2. Growth. The business must be able to grow its market share domestically and/or globally.
3. Track Record. The business must have a track record; else one cannot project its future.
4. Relevancy. The business must be relevant in multiple markets in that the business can expand its products into varying countries with ease.
5. Management. The business must possess able managers that focus on building shareholder value by; maintaining high return on equity, buying back shares, and owning personal stake in the business.
6. Competitive Advantage. The business must possess such a strong competitive advantage that other businesses fail to entrench on its market.
7. Earnings. The business must be growing its earnings over time.
8. Pricing Power. The business must be able to increase prices over time in line with inflation or greater.
9. Return on Equity. The business must enjoy high return on equity. Otherwise, it is not building shareholder value.
10. Consistency. The business must be consistent. The inconsistent business changes with the wind.
11. Profit Margin. The business must generate consistently high profit margins.
12. Personal Appeal. The business must appeal to you. You must love to such an extent its products or services that you can endorse the business without hesitation.
13. Book Value. The business must be growing its book value and, in turn, its underlying value.
14. Simplicity. The business must be selling a product or service that anyone can understand.
15. Repeat Use. The business must sell a product or service that is purchased consistently and continuously by the consumer.
16. Utility. The business must possess lasting utility such that underlying its brand, its products or services satisfy a consumer need or want.
17. Market Leader. The business must be a market leader. The market leader enjoys little competition.
18. Consumer Base. The business must enjoy a large consumer base, preferably both domestically and globally, so that it is not plagued by volatile revenues.
19. Employee Morale. The business’s employees must be happy to work there. A happy top line creates a better bottom line.
20. Adaptability. A quality business must be relevant forever by understanding how to sell in future markets.
21. Self Growth. The business must not grow by financing credit but instead grow by effectively allocating its retained earnings.
22. Debt. The business must not be burdened by significant long term debt, otherwise risk staggered growth.