Quality compounders
Query: US quality compounders: large-cap stocks with return on equity above 20%, net margin above 15% and consistent revenue growth, compared by forward P/E · data as of 2026-10-09
Built a large-cap quality-compounder screen: 45 US stocks with market cap >= $10B, ROE > 20%, net margin > 15% and positive, sustained revenue growth (with multi-year revenue CAGR shown), ranked by lowest forward P/E ascending. Includes a rationale panel explaining the high-ROE + strong-margin + steady-growth theme and the $10B large-cap definition, plus qualitative notes on key names (valuation discounts vs. business quality, cyclicality, buyback-distorted ROE).
Large-cap (>= $10B) quality compounders with ROE > 20%, net margin > 15% and positive, sustained revenue growth — 45 names ranked by lowest forward P/E.
Screen Rationale
The Quality-Compounder Screen
A quality compounder is a business that earns high returns on the capital it reinvests and converts that growth into durable profit — the textbook recipe for compounding shareholder value over long holding periods. This screen isolates large caps (market cap >= $10B) that clear three quality bars simultaneously:
- Return on equity above 20% — management generates outsized profit per dollar of book capital.
- Net profit margin above 15% — pricing power and cost discipline, not just scale.
- Positive and sustained revenue growth — revenue is expanding year-over-year, with a multi-year revenue CAGR (5-year, or 3-year where a longer history is unavailable) shown alongside to confirm the growth is consistent rather than a single spike.
Why forward P/E? Ranking by forward P/E ascending surfaces the highest-quality franchises that the market is least willing to pay up for — the intersection of durable economics and valuation discipline. The distinction is subtle but important: ROE and margins tell you how good the business is, while the multiple tells you what you are asked to pay for it. Names at the top combine above-average returns on capital with below-market forward multiples; those further down are still quality businesses, just priced more richly.
Reading the list. Several financials, insurers and asset managers screen cheaply here because book value — not earnings power — anchors their ROE, so pair the numeric filters with the sector and industry columns. Where ROE is extreme (well above 100%), buybacks that shrink the equity base are usually flattering the ratio; treat it as a signal to look at the underlying margin and cash flow instead.
The context columns — P/E (TTM), EPS growth, 1M/6M/1Y returns, distance from the 52-week high, and momentum potential — frame the setup: whether a quality name is being accumulated on strength or offered at a discount after a pullback. In a tape still paying a premium for secular growth, cheap-and-durable is where the contrarian edge tends to live.
Large cap is defined as market cap >= $10B. Fundamentals are latest reported figures; forward P/E is based on consensus next-twelve-month EPS estimates.
Large-Cap Quality Compounders — Ranked by Lowest Forward P/E
| Symbol | Company | Sector | Industry | Theme | Market Cap | ROE | Net Margin | Revenue Growth YoY | Revenue CAGR (5Y/3Y) | Forward P/E | P/E (TTM) | EPS Growth YoY | 1M Return | 6M Return | 1Y Return | % from 52W High | Momentum Potential | Comments |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TPL | Texas Pacific Land Corporation | Energy | Oil & Gas E&P | Oil & Gas Royalty & Land | 2.49e+10 | 30.94% | 60.31% | 13.09% | 21.41% | 4.94 | 45.93 | 6.04% | -1.40% | -11.67% | 14.34% | -33.13% | 33.8 | A royalty/landowner model with effectively zero capital intensity — it collects a share of oil & gas production without drilling, so margins run extraordinarily high. The catch is commodity-price sensitivity: earnings track energy realizations, which is why it trades at a deep discount to its trailing multiple despite pristine economics. |
| HMY | Harmony Gold Mining Company Lim | Materials | Gold | Gold & Silver Mining | 1.074e+10 | 29.99% | 19.69% | 20.39% | 20.37% | 5.05 | 10.62 | 67.45% | -16.39% | 3.77% | -8.53% | -35.18% | 89.5 | — |
| PDD | PDD Holdings Inc. | Consumer Discretionary | Internet Retail | Online Retail Marketplaces | 1.158e+11 | 23.67% | 22.66% | 14.45% | 46.61% | 6.64 | 8.51 | -9.17% | 4.51% | -18.79% | -39.19% | -41.11% | 71.2 | Pinduoduo's parent pairs a dominant low-price Chinese e-commerce platform with Temu's global expansion. The market is discounting regulatory and geopolitical risk plus the cost of funding Temu's growth, which explains the single-digit forward multiple on otherwise elite profitability. |
| GFI | Gold Fields Limited | Materials | Gold | Gold & Silver Mining | 3.28e+10 | 24.05% | 24.81% | 15.57% | 11.88% | 6.86 | 9.35 | 77.68% | -17.57% | -23.68% | -10.69% | -40.14% | 34 | — |
| GEN | Gen Digital Inc. | Information Technology | Software - Infrastructure | Cybersecurity | 1.392e+10 | 37.27% | 19.46% | 27.06% | 14.41% | 7.04 | 13.6 | 51.32% | -22.42% | 31.23% | -12.94% | -25.98% | 97.7 | Consumer cybersecurity (Norton, Avast) is a subscription annuity with high renewal rates, and the Avast integration is the driver of the recent growth and margin expansion. It sits in one of the strongest thematic pockets of the market right now — cybersecurity leadership. |
| AER | AerCap Holdings N.V. | Industrials | Rental & Leasing Services | Equipment Rental Services | 2.275e+10 | 20.47% | 44.04% | 6.50% | 13.64% | 7.95 | 7.11 | 78.72% | 3.05% | -0.01% | 19.75% | -6.78% | 31.2 | Aircraft lessor trading near book value with a diversified, long-duration lease book. Rising rates and residual-value risk are the overhangs, but a resilient air-travel cycle keeps cash flows predictable and supports the low forward multiple. |
| RNR | RenaissanceRe Holdings Ltd. | Financials | Insurance - Reinsurance | Reinsurance | 1.377e+10 | 31.42% | 28.16% | 9.86% | 19.96% | 8.08 | 5.75 | 22.20% | 1.61% | 9.64% | 26.92% | -1.95% | 40.7 | — |
| ALL | Allstate Corporation (The) | Financials | Insurance - Property & Casualty | Property & Casualty Insurance | 5.801e+10 | 32.48% | 15.17% | 5.58% | 10.06% | 8.32 | 4.6 | 123.22% | -8.88% | 9.31% | 9.68% | -16.60% | 63.4 | P&C insurer whose earnings power has inflected as auto insurance pricing caught up with claims inflation. ROE and margins look elevated partly because they are recovering off a soft base, so sustainability depends on a benign catastrophe year. |
| EIX | Edison International | Utilities | Utilities - Regulated Electric | Power Generation & Utilities | 2.128e+10 | 27.14% | 24.34% | 9.76% | 7.31% | 8.5 | 5.71 | 204.08% | -0.95% | -24.89% | 9.24% | -31.20% | 11.7 | — |
| RCI | Rogers Communication, Inc. | Communication Services | Telecom Services | Telecommunications Carriers | 1.959e+10 | 28.44% | 48.83% | 3.22% | — | 8.5 | 3.62 | 298.27% | -17.48% | -6.42% | -13.80% | -27.31% | 19.1 | — |
| ADBE | Adobe Inc. | Information Technology | Software - Application | Enterprise Cloud Applications | 9.429e+10 | 61.90% | 30.00% | 10.53% | 13.06% | 8.81 | 13.87 | 28.24% | -2.64% | 7.51% | -30.54% | -32.69% | 79.3 | A classic cash-generating software franchise now the cheapest it has been in years. The debate is whether generative AI is a tailwind (Firefly) or a threat to its creative moat — the discount is the market pricing that uncertainty rather than a deterioration in the core business. |
| GSK | GSK plc | Health Care | Drug Manufacturers - General | Pharmaceuticals | 1.015e+11 | 39.41% | 19.25% | 4.11% | 6.05% | 9.05 | 14.58 | 113.11% | -3.37% | -18.66% | 11.07% | -23.99% | 18.6 | A defensive pharma with a dominant vaccines and HIV portfolio, trading at a persistent discount to US peers. Pipeline execution and litigation overhangs keep the multiple compressed despite sturdy margins. |
| AMG | Affiliated Managers Group, Inc. | Financials | Asset Management | Asset Management | 1.001e+10 | 29.26% | 43.58% | 1.64% | 0.46% | 9.19 | 13.59 | 22.06% | 9.23% | 35.72% | 59.96% | 0.00% | 98.7 | Asset manager that has diversified into alternatives (private credit, GP stakes), which supports fee durability. The low forward multiple is typical of the asset-management complex, where earnings are cyclical with markets and fee compression. |
| FUTU | Futu Holdings Limited | Financials | Capital Markets | Asset Management | 1.594e+10 | 28.34% | 49.62% | 67.78% | 47.04% | 9.31 | 12.58 | 107.88% | 0.18% | -25.22% | -35.33% | -42.87% | 88.7 | Hong Kong-based online broker levered to mainland and cross-border retail trading activity. Revenue surges with engagement, but that same cyclicality and China exposure keep the multiple low — a high-beta way to own a quality-margin franchise. |
| GDDY | GoDaddy Inc. | Information Technology | Software - Infrastructure | Web Hosting & Domain Services | 1.322e+10 | 368.73% | 17.67% | 8.26% | 8.34% | 9.46 | 15.51 | -6.61% | 8.28% | 29.11% | -23.94% | -22.88% | 83.5 | — |
| PYPL | PayPal Holdings, Inc. | Financials | Credit Services | Fintech & Digital Payments | 4.75e+10 | 26.13% | 15.78% | 4.32% | 9.11% | 9.58 | 10.5 | 26.19% | 4.16% | 23.45% | -26.25% | -26.69% | 70 | Payments incumbent leaning on branded checkout, Braintree and Venmo. Margin mix has been the key story as management shifts growth toward higher-margin branded volume; the forward multiple reflects the mature-growth debate. |
| AMP | Ameriprise Financial, Inc. | Financials | Asset Management | Asset Management | 4.421e+10 | 57.36% | 18.84% | 5.49% | 9.60% | 9.71 | 12.1 | 4.76% | -9.58% | 16.27% | 2.76% | -12.30% | 81.1 | — |
| BCE | BCE, Inc. | Communication Services | Telecom Services | Telecommunications Carriers | 2.211e+10 | 27.95% | 28.67% | 4.60% | — | 9.79 | 3.86 | 1637.07% | -18.13% | -17.43% | -14.82% | -29.00% | 13.8 | — |
| DECK | Deckers Outdoor Corporation | Consumer Discretionary | Footwear & Accessories | Apparel & Footwear | 1.129e+10 | 40.97% | 18.71% | 9.76% | 16.54% | 9.91 | 11.79 | 6.00% | 3.77% | -23.15% | -18.40% | -31.46% | 52.8 | Hoka and Ugg have driven a rare multi-year growth streak in footwear, and the profit margin expansion has been the real story. The forward multiple is modest for the growth rate — the market worries about consumer discretionary softness and channel inventory. |
| HALO | Halozyme Therapeutics, Inc. | Health Care | Biotechnology | Biopharma Drug Discovery Platforms | 1.253e+10 | 220.76% | 22.69% | 37.55% | 39.16% | 10.62 | 32.38 | -28.64% | 3.20% | 62.81% | 69.36% | -4.17% | 99 | Royalty-driven biotech: Halozyme monetizes its drug-delivery enzyme platform through licensing fees, so margins and returns on capital are exceptional and asset-light. Growth depends on partner drug volumes rather than its own pipeline spend. |
| CF | CF Industries Holdings, Inc. | Materials | Agricultural Inputs | Fats | 1.688e+10 | 31.28% | 25.38% | 19.34% | 11.43% | 10.7 | 8.27 | 21.73% | -17.45% | -7.21% | 25.54% | -19.91% | 50.1 | — |
| NEM | Newmont Corporation | Materials | Gold | Gold & Silver Mining | 1.242e+11 | 20.52% | 31.62% | 21.34% | 14.54% | 11.14 | 14.86 | 111.98% | -6.58% | -2.10% | 34.55% | -12.80% | 92.4 | The world's largest gold miner, now earning through a favorable metal-price environment after years of portfolio optimization. Earnings are a direct levered play on gold, so the valuation discount moves with the commodity rather than with management execution. |
| ZTS | Zoetis Inc. | Health Care | Drug Manufacturers - Specialty & Generic | Pharmaceuticals | 3.091e+10 | 82.68% | 28.23% | 2.28% | 7.24% | 11.25 | 12.2 | 7.52% | 2.68% | -35.81% | -46.86% | -49.29% | 3.4 | — |
| NVO | Novo Nordisk A/S | Health Care | Drug Manufacturers - General | Autoimmune & Immunology Therapies | 2.067e+11 | 52.79% | 33.14% | 6.43% | 19.48% | 11.34 | 9.52 | 1.43% | -12.20% | 4.30% | -31.94% | -39.61% | 26.4 | GLP-1 leadership (Ozempic, Wegovy) drove an extraordinary multi-year growth run, and the current de-rating reflects competitive intensity and pipeline concerns rather than a weakening franchise. Now a rare case of an ultra-high-ROE compounder trading at a market-like forward multiple. |
| TIGO | Millicom International Cellular | Communication Services | Telecom Services | Telecommunications Carriers | 1.333e+10 | 37.61% | 23.41% | 0.26% | — | 11.63 | 19.87 | 408.21% | -16.93% | -2.69% | 76.46% | -23.80% | 58.5 | — |
| NTES | NetEase, Inc. | Communication Services | Electronic Gaming & Multimedia | Video Game Publishers & Developers | 7.955e+10 | 21.71% | 30.90% | 11.65% | 7.36% | 11.72 | 15.83 | 20.05% | 7.45% | 11.32% | -17.33% | -18.72% | 89.8 | China's second-largest game publisher with a cash-rich balance sheet and steady, high-margin PC/console titles. The multiple reflects China regulatory and ADR risk more than business quality. |
| EVR | Evercore Inc. | Financials | Capital Markets | Asset Management | 1.046e+10 | 35.95% | 16.51% | 29.49% | 11.17% | 12.04 | 15.3 | 53.38% | -4.15% | -19.09% | -13.58% | -29.04% | 48.4 | — |
| SOLV | Solventum Corporation | Health Care | Medical Instruments & Supplies | Medical Devices & Surgical Technologies | 1.486e+10 | 31.31% | 18.69% | 0.86% | — | 12.09 | 10.67 | 224.84% | -0.41% | 32.68% | 20.52% | -5.57% | 50.9 | The healthcare spin-off from 3M, still early in its standalone life. Management is focused on margin recovery and portfolio pruning; the discount reflects execution and litigation-inheritance risk rather than the underlying med-tech quality. |
| CHKP | Check Point Software Technologi | Information Technology | Software - Infrastructure | Cybersecurity | 1.401e+10 | 36.67% | 38.78% | 6.25% | 5.71% | 12.14 | 14.07 | 24.97% | 5.11% | 1.45% | -31.75% | -32.88% | 48.2 | — |
| INFY | Infosys Limited | Information Technology | Information Technology Services | IT Services & Consulting | 4.346e+10 | 28.09% | 28.91% | 7.16% | — | 12.64 | 13.25 | -0.22% | -1.65% | -17.52% | -33.53% | -46.93% | 10.2 | — |
| INCY | Incyte Corporation | Health Care | Biotechnology | Oncology Therapeutics | 2.286e+10 | 22.88% | 25.03% | 21.22% | 14.03% | 12.66 | 14.35 | 3844.96% | -8.51% | 17.40% | 32.10% | -13.19% | 93.1 | — |
| CPAY | Corpay, Inc. | Information Technology | Software - Infrastructure | Fintech & Digital Payments | 2.613e+10 | 30.54% | 23.67% | 13.93% | 13.65% | 12.74 | 24.2 | 6.80% | -2.58% | 31.40% | 36.15% | -6.42% | 84 | Corporate payments and fleet-fuel card processor with a recurring, sticky revenue base and secular tailwinds from B2B digitization of payments. A compounder that rarely screens cheap, it sits here on a modest forward multiple. |
| AON | Aon plc | Financials | Insurance Brokers | Insurance Brokers | 5.801e+10 | 39.07% | 21.83% | 9.45% | 9.20% | 12.81 | 15.06 | 37.87% | -11.14% | -12.08% | -24.79% | -28.27% | 39.4 | — |
| ORCL | Oracle Corporation | Information Technology | Software - Infrastructure | Enterprise Cloud Applications | 4.287e+11 | 40.72% | 25.70% | 17.35% | 10.72% | 12.95 | 24.25 | 37.08% | -7.55% | 2.75% | -50.45% | -54.82% | 35.7 | Oracle's cloud infrastructure backlog has re-accelerated growth dramatically, but the market has pushed the stock down on the heavy capital spending required to build AI data centers. The tension between growth and free cash flow is the whole story. |
| CNQ | Canadian Natural Resources Limi | Energy | Oil & Gas E&P | Integrated Oil & Gas | 8.562e+10 | 24.39% | 27.91% | 8.71% | 18.07% | 12.99 | 12.26 | 77.20% | -1.39% | 9.24% | 56.58% | -4.17% | 52.7 | — |
| AM | Antero Midstream Corporation | Energy | Oil & Gas Midstream | Natural Gas Midstream | 1.001e+10 | 21.34% | 34.77% | 7.43% | 5.70% | 13.08 | 25.41 | 3.06% | -5.30% | -2.26% | 14.03% | -10.64% | 43.3 | — |
| TPR | Tapestry, Inc. | Consumer Discretionary | Luxury Goods | Luxury Handbags & Accessories | 2.307e+10 | 220.73% | 19.09% | 14.17% | 6.85% | 13.1 | 15.99 | 733.90% | 0.32% | -22.15% | 0.79% | -29.46% | 78.1 | — |
| APP | Applovin Corporation | Communication Services | Advertising Agencies | Ad-Tech & Digital Advertising | 9.307e+10 | 141.05% | 60.83% | 69.99% | 30.45% | 13.19 | 21.31 | 111.03% | -11.91% | -29.21% | -56.00% | -62.24% | 86.4 | AppLovin's mobile-advertising engine produced one of the fastest margin expansions in software history. The extreme return on equity reflects buybacks shrinking the equity base; the risk is that the ad-tech growth rate proves non-durable. |
| LNG | Cheniere Energy, Inc. | Energy | Oil & Gas Midstream | Natural Gas Midstream | 5.745e+10 | 141.94% | 26.68% | 27.21% | 16.38% | 13.4 | 21.07 | 63.90% | 0.12% | 5.23% | 19.16% | -6.31% | 48.8 | LNG export infrastructure with long-term contracted cash flows — a toll-road on global gas demand with a large buyback supporting per-share returns. Capex-cycle timing around new trains is the main swing factor. |
| APH | Amphenol Corporation | Information Technology | Electronic Components | Power & Electronic Components | 2.151e+11 | 30.80% | 18.64% | 51.71% | 21.85% | 13.57 | 21.76 | 76.33% | 8.88% | 24.34% | 39.68% | -1.56% | 99.6 | Amphenol is a structural AI/data-center connectivity beneficiary as much as a broad industrial. Its consistent M&A-driven compounding has kept returns on capital high and revenue growth accelerating, which is why it commands one of the richer multiples on this list. |
| VG | Venture Global, Inc. | Energy | Oil & Gas Midstream | Natural Gas Midstream | 3.29e+10 | 37.79% | 19.85% | 176.93% | — | 13.58 | 10.05 | 56.53% | -14.87% | 1.87% | 1.82% | -24.93% | 42 | — |
| AZN | AstraZeneca PLC | Health Care | Drug Manufacturers - General | Oncology Therapeutics | 2.469e+11 | 21.00% | 17.42% | 8.63% | 17.15% | 13.75 | 23.83 | 45.33% | -0.28% | -20.72% | -5.72% | -24.00% | 15.1 | A UK pharma with a strong oncology and biopharma franchise and one of the more reliable growth pipelines in large-cap pharma. The discount to US peers partly reflects its London listing and currency exposure. |
| MLI | Mueller Industries, Inc. | Industrials | Metal Fabrication | Steel Production | 1.343e+10 | 23.20% | 18.51% | 10.87% | 11.75% | 13.86 | 15.81 | 25.27% | 0.91% | 0.76% | 22.38% | -13.78% | 77.2 | — |
| XP | XP Inc. | Financials | Capital Markets | Asset Management | 1.635e+10 | 22.52% | 60.81% | 13.67% | 15.61% | 13.88 | 16.61 | 15.78% | 61.34% | 63.27% | 103.37% | 0.00% | 92.1 | — |
| RCL | Royal Caribbean Cruises Ltd. | Consumer Discretionary | Travel Services | Airlines | 7.549e+10 | 41.92% | 23.93% | 8.80% | 52.02% | 13.92 | 17.42 | 48.17% | 9.62% | 3.06% | -6.62% | -18.90% | 66.4 | Cruise operator enjoying record demand and pricing, with free cash flow inflecting sharply as the post-pandemic debt overhang is worked down. It scores high on return on equity largely because the equity base was rebuilt from a low point. |
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