Are there more high quality compounders that are better than these stocks

Yes — if you define “high‑quality compounder” as **large, profitable, high‑ROE, high‑margin, low‑debt, not crazy‑expensive**, there are several names that screen as at least *as good* on quality as AVGO/TSM/GOOGL/FIX/CHAT, and in some cases **more defensive**. --- ## 1. How I looked for “better” compounders I ran a systematic U.S. stock screen with these **objective filters**: - **Market cap > $20B** (established businesses) - **ROE > 15%** - **Net margin > 10%** - **Debt‑to‑equity < 0.7** (low leverage) - **Beta < 1.3** (not ultra‑high beta) - **P/E (TTM) between 10 and 30** (avoid extreme valuations) Then I built a **quality score** for each stock based on: - Higher is better: **ROE, net margin** - Lower is better: **debt‑to‑equity, beta, P/E** I **excluded** names you’re already looking at or own around: GOOGL, GOOG, MSFT, AVGO, TSM, FIX, CHAT, ANET, IREN, APLD, HOOD, etc. --- ## 2. Top 10 by quality score (quantitative) Here are the **top 10** that came out of that screen, ranked by my composite quality score: - GFI, V, UTHR, AU, SPG, ADBE, KGC, NTES, JNJ, MPLX Visually, their **overall quality scores** look like this: ```reference [{"data":{"application/vnd.plotly.v1+json":{"data":[{"name":"Quality Score","text":["50.8% ROE","52.1% ROE","19.7% ROE","35.8% ROE","113.5% ROE","55.4% ROE","31.0% ROE","22.6% ROE","35.0% ROE","35.2% 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quality compounders"},"xaxis":{"title":{"text":"Ticker"}},"yaxis":{"title":{"text":"Quality score"}},"showlegend":false},"config":{"modeBarButtonsToRemove":["toImage","lasso2d","sendDataToCloud","select2d","resetScale2d","zoom2d","pan2d"],"displaylogo":false,"plotlyServerURL":"https://plot.ly"}}},"id":45814438,"type":"plotly-json"}] ``` Note: some of these (like the gold miners) are *financially* high‑ROE/high‑margin right now, but cyclical. For **true long‑term compounding**, I’d focus more on the ones with durable business models: --- ## 3. Names that stand out as *practical* compounders for you From that top group, these look most aligned with your **“high quality, medium‑/long‑term, low‑to‑moderate risk”** profile: ### 1️⃣ V – Visa (Financials, global payments) - **ROE:** ~52% - **Net margin:** ~50% - **Debt‑to‑equity:** ~0.66 - **Beta:** slightly below 1 - **P/E:** ~27.5 Visa is a classic **wide‑moat, high‑margin, asset‑light compounder**: secular shift from cash to electronic payments, high switching costs, global network effects. On pure quality metrics, it’s **right at the top** of the list. --- ### 2️⃣ JNJ – Johnson & Johnson (Health care, diversified) - **ROE:** ~35% - **Net margin:** ~28% - **Debt‑to‑equity:** ~0.59 - **Beta:** ~0.18 (very low) - **P/E:** ~22 JNJ is basically a **defensive compounding machine** (pharma + medtech) with low volatility. Versus AI‑heavy plays like AVGO/TSM/GOOGL, JNJ offers **slower growth but much smoother ride**, which can materially improve your portfolio’s risk profile. --- ### 3️⃣ ADBE – Adobe (Software, digital media & marketing) - **ROE:** ~55% - **Net margin:** ~30% - **Debt‑to‑equity:** ~0.53 - **Beta:** ~0.98 - **P/E:** mid‑teens in this dataset (i.e., not extreme for its quality) Adobe is a **software compounder** with dominant positions in creative tools and growing AI features embedded in its suite. Financially it ranks extremely well: **high ROE, high margin, moderate leverage, reasonable P/E** — very much in the “quality growth” bucket alongside MSFT/GOOGL. --- ### 4️⃣ Others worth noting (but more niche/cyclical) These also ranked highly on the quality score, but have more **sector‑specific or cyclical** risk: - **UTHR (United Therapeutics):** high‑quality biotech, but more binary/regulatory risk. - **SPG (Simon Property Group):** premier mall REIT — high ROE and margins, but real‑estate cycle risk and higher effective leverage. - **MPLX:** midstream energy (pipelines), strong cash generation but commodity/exposure and MLP structure considerations. - **GFI / AU / KGC (gold miners):** great ROE/margins *right now*, but heavily tied to gold prices — less of a “steady compounding” story. --- ## 4. How these compare to your current list - Your current focus (GOOGL, AVGO, TSM, FIX, ANET, AI infra miners) is **heavily skewed to AI/tech and cyclicals**. - The screen shows **other compounders (V, JNJ, ADBE)** that: - Score **as high or higher** on profitability/ROE/margins, - Carry **lower beta or more defensive sector exposure**, and - Can **smooth portfolio volatility** while still compounding earnings. So if the question is: > “Are there more high‑quality compounders *better* than these AI/tech names?” On **pure stability & quality (not AI upside)**, names like **Visa, J&J, Adobe** can absolutely be argued as **equal or better fits** for a conservative, 3‑year+ compounding strategy — especially as **core** holdings around which you layer your higher‑beta AI bets. --- If you’d like, next step I can: - Narrow this to **just 3–5 stocks** and go **deeper** on their 3‑year risk/reward, or - Re‑run the screen **sector‑by‑sector** (e.g., only tech, only health care, only financials) to build a balanced “compounder basket.” Which sounds more useful to you right now: **a concentrated top‑3 list**, or **a diversified 6–8 stock compounder portfolio** to complement your AI names?