Finder may earn compensation from partners, but editorial opinions are our own. Advertiser Disclosure
Stock Ratings – How do we calculate “best stock” picks?
We compared factors including performance data, dividends and revenue figures to help you narrow down your choices.
There’s no single share that’s best for all investors as all our needs are different – and what’s best for you might not be best for someone else. No-one can say for certain which direction stocks will go; these are investment ideas only and should not be taken as financial advice.
Finder’s stock ratings are calculated using our proprietary algorithm which takes into account a variety of factors to determine whether a stock could be suitable to buy. The selection criteria is based on internal and external factors that might affect the price of the stock moving forward.
How is the rating determined?
For a stock to be included on our ratings list, it must have been listed on the New York Stock Exchange or the Nasdaq for a minimum of five years, while also having a minimum market cap of $10 billion. After meeting these initial criteria, each stock is given a set number of points depending on how it performs in each of the categories below.
Which factors contribute to the final score?
Our stocks are rated depending on price performance over periods of one month to five years, volatility levels, revenue growth, profit margins and dividends. This is how we measured each factor:
Category: 1-year stock price performance
Method: More points are given to companies where stock prices have risen over the last 12 months and no points are assigned to stocks where prices are lower today than they were 12 months ago.
Category: 5-year stock price performance
Method: We assign more points to stocks where prices have risen over the last 5 years and no points to stocks where prices are lower today than they were 5 years ago.
Method: We assign more points to stocks with betas that are closer in range to beta 1 and fewer points to stocks with greater variance.
Category: Growth days over the last month
Method: Stocks with a higher percentage of price growth days versus price fall days over the last 30 days are assigned more points.
Category: Revenue growth
Method: Companies with higher quarterly revenue growth (year on year) are assigned more points.
Category: Profit margin
Method: More points are assigned to companies with a higher profit margin and no points are given where there is zero profit margin or less.
Method: Extra points are assigned to a company if it has paid a dividend at least once in the last 12 months.
The above criteria allows for a max score of 41. That score is then turned into a rating score out of 100 to produce a rating.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
More guides on Finder
What are the best stocks for October 2021?
Our algorithm selected 20 stocks worth watching this month.
How to invest during a stock market bubble
If we’re heading into a stock market bubble, you can take some steps to protect your investments.
Free and paid stock screeners designed to help you identify trading opportunities.
Investing in financial stocks
Financial stocks drive the economy and affect many aspects of a consumer’s economic life.
How do we pick the top money transfer services?
Our top picks are our selection of the best money transfer services, based on our extensive research and market experience. Here’s how we choose them.
Day trading 101: What it is and how it works
How day trading works, what to watch out for and how to pick a broker.
How to buy gold
Learn where to buy gold, how to invest in gold and about gold’s historical performance as an investment. Find out all the need-to-knows with our extensive guide.
7 places to invest when interest rates are low
When interest rates drop, it may be time to switch up your investment strategy.
Short selling explained: How to short stocks
Learn the basics of short selling to profit when prices are down.
The best-performing ETFs for 2021
The best-performing exchange-traded funds over the past year, three years or five years can help inform your decision on what to invest in for the future.
Ask an Expert