Methodology
How the HDB Score works
A transparent look at how we measure business quality — what the score rewards, how the numbers are built, and, just as importantly, what they can't tell you. No black boxes, no predictions.
In short
- 📈The HDB Score rates a company on the quality and consistency of its revenue and profit over up to 30 years — profit weighted above revenue.
- 🧭It measures business quality — not whether the stock is cheap, and not whether to buy or sell.
- 🔎Strong fundamentals and strong stock performance go hand-in-hand while they last — but past strength is not a promise of future returns.
- 🗄️Built from EODHD fundamental data, normalized to be comparable across companies.
What the HDB Score measures
The score combines eight signals, drawn from a company's revenue and net income over the chosen period. Each is scored on the same scale so they can be combined:
Revenue growth
How much the top line expanded over the period.
Net income growth
How much profit expanded — the signal we weight most heavily.
Consistent revenue growth
How often revenue grew year over year, not just start-to-finish.
Consistent profit growth
How often net income grew year over year — steady, not lumpy.
Revenue predictability
How closely revenue tracked a steady compounding path.
Profit predictability
How closely profit tracked a steady compounding path.
Revenue scale
The cumulative size of the business, in a common currency.
Profit scale
The cumulative profit generated, in a common currency.
Profit is weighted above revenue. Durable earnings — not sales for their own sake — are what compound a business's value over the long run, so net-income signals carry roughly two-thirds of the score and revenue signals about one-third. These weights are fixed and disclosed; we do not tune them to make any historical result look better.
How we handle the messy cases
- Losses and negative years count against a company — a business that swung through losses scores lower on consistency and growth than one that grew steadily.
- Missing history. A period is only scored when there's enough data to score it — a company without 10 years of history simply has no 10-year score, rather than a guessed one.
- Consistency needs enough points. Our predictability measure — how steadily a company compounds — is only applied over longer windows, where there are enough years to measure it reliably.
- Atypical sectors. Banks, insurers and REITs report differently from operating companies, and we're candid that a single revenue-and-profit lens fits them less cleanly. We compare each company against the whole market rather than only its sector — a deliberate choice, and a limitation worth knowing.
What the score is not
The HDB Score measures historical business quality and consistency. It does not measure valuation, and it is not a buy or sell signal. An excellent company can be a poor investment at too high a price, and a high score says nothing about the price you'd pay today. Treat the rankings as a research starting point — never as a recommendation.
What the numbers mean — and what they don't
Over the long run, a stock's price tends to follow its business results. So it's no surprise that the companies with the strongest fundamentals over a period were, in large part, the ones whose shares did well over that same period. That relationship is real, and it's the reason a fundamentals lens is worth having.
Here's that relationship in our own historical review — the 50 companies with the strongest HDB Scores as of 2016, measured against the S&P 500, in the decade they built that strength and the decade that followed:
| Group | While fundamentals were strong (2006–2016) | The decade after (2016–2026) |
|---|---|---|
| Strongest-fundamentals companies | +286% | +129% |
| S&P 500 | +103% | +317% |
While those companies were building their track record (2006–2016), they returned a median +286% — about 2.8× the S&P 500's +103%. Over the decade after (2016–2026), the same group returned +129% while the S&P 500 returned +317%. The strength was real — it just showed up in the price while it was happening, not after.
Read this as a look-back, not a forward test. The “during” figures select companies we already know ended strong, so they show the fundamentals-to-price relationship — not an edge you could have captured ahead of time. The “after” figures are the honest out-of-sample result, and they trailed the index. This review also covers only companies still listed today, which flatters the past; we're working to close that gap.
But it comes with an honest limit we won't hide from: strength that has already happened is often already reflected in the price. In our own historical review, companies that had built a decade of excellent fundamentals tended to lag the market over the decade that followed — business quality is not permanent, and leadership turns over. Buying purely because a company looked great in the past is, too often, buying the part of the story that's already over.
That's why we don't headline a “turn $1,000 into $X” number. Picking today's top-ranked companies and pointing at their past returns is a backward-looking illustration — it selects the winners with hindsight. We'd rather show you the tool and let you judge the businesses than sell you a backtest.
Data and updates
Fundamental data comes from EODHD. We normalize figures — including currency conversion to a common basis — so companies can be compared like-for-like across up to 30 years, and refresh the data on a regular schedule. Our coverage currently reflects companies that are listed today; we're candid that this leaves out businesses that were delisted along the way, which any historical comparison should be read in light of.
What this is for
Holder Dashboard is a fundamental ranking and research tool for long-term, self-directed investors — a clear, comparable way to find and follow businesses with strong track records. It is deliberately specialized: not a trading terminal, not a stock-picking service, and not investment advice. You bring the judgment; we make the evidence easy to see.
