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:
Profit growth
How much net income expanded over the period.
Consistent profit growth
How often net income grew year over year — steady, not lumpy.
Profit predictability
How closely profit tracked a steady compounding path.
Profit scale
The cumulative profit generated, in a common currency.
Revenue growth
How much the top line expanded over the period.
Consistent revenue growth
How often revenue grew year over year, not just start-to-finish.
Revenue predictability
How closely revenue tracked a steady compounding path.
Revenue scale
The cumulative size of the business, 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 70% of the score and revenue signals 30%. These weights are fixed, identical for every company, and published below in full.
The exact weights
The HDB Score is a weighted average of eight signals. The weights are fixed, identical for every company, and published here in full:
| Signal | What it measures | Weight |
|---|---|---|
| Profit growth | How much net income expanded over the period. | 17% |
| Consistent profit growth | How often net income grew year over year — steady, not lumpy. | 26% |
| Profit predictability | How closely profit tracked a steady compounding path. | 21% |
| Profit scale | The cumulative profit generated, in a common currency. | 6% |
| Profit signals subtotal | 70% | |
| Revenue growth | How much the top line expanded over the period. | 7% |
| Consistent revenue growth | How often revenue grew year over year, not just start-to-finish. | 12% |
| Revenue predictability | How closely revenue tracked a steady compounding path. | 9% |
| Revenue scale | The cumulative size of the business, in a common currency. | 2% |
| Revenue signals subtotal | 30% | |
| Total | 100% | |
Score version: v1 (weights frozen May 2026)
Not every signal applies to every period. The 1-year and 5-year periods omit predictability — too few years to fit a trend reliably — and the all-time period omits scale, because older companies accumulate more of it simply by being older. When a signal is left out, the remaining weights are rescaled to 100%, so profit carries 70% of the score in every period except all-time, where it carries 69.6%.
How we chose them
These weights are judgment calls, not the output of an optimization. They encode a buy-and-hold philosophy — durable profitability matters more than top-line growth.
The 70% / 30% split between profit and revenue signals has been in place since the score existed. The individual signal weights were last revised in May 2026, when we added the two cumulative-scale signals and changed how the bounded metrics are normalized; they have been frozen since. Every score on this site is recomputed nightly from the weights above, so nothing you see was produced by an older version. If we change them again, we'll version the score and say so here.
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:
The 50 companies ranked strongest on fundamentals using only data available in 2016, equal-weighted and held with no rebalancing. Each panel is indexed to 100 at its own start, because the first decade is a description of the companies and not a portfolio anyone held. Two members had not listed by 2006, so that panel averages 48 names. Adjusted closes, dividends reinvested on both sides.
| Year | Cohort | S&P 500 |
|---|---|---|
| 2006 (building the record) | 100 | 100 |
| 2007 (building the record) | 127 | 120 |
| 2008 (building the record) | 106 | 105 |
| 2009 (building the record) | 93 | 77 |
| 2010 (building the record) | 128 | 88 |
| 2011 (building the record) | 222 | 117 |
| 2012 (building the record) | 254 | 121 |
| 2013 (building the record) | 325 | 147 |
| 2014 (building the record) | 465 | 183 |
| 2015 (building the record) | 550 | 196 |
| 2016 (building the record) | 521 | 203 |
| 2016 (after selection) | 100 | 100 |
| 2017 (after selection) | 122 | 118 |
| 2018 (after selection) | 139 | 134 |
| 2019 (after selection) | 147 | 149 |
| 2020 (after selection) | 145 | 160 |
| 2021 (after selection) | 222 | 225 |
| 2022 (after selection) | 202 | 202 |
| 2023 (after selection) | 244 | 239 |
| 2024 (after selection) | 276 | 298 |
| 2025 (after selection) | 298 | 342 |
| 2026 (after selection) | 351 | 432 |
While those companies were building their track record (2006–2016), an equal-weight basket of them returned +421% on average — about 4.1× the S&P 500's +103%. As you'd expect from a basket, a handful of exceptional winners do much of that lifting. Over the decade after (2016–2026), the same basket returned +251% while the S&P 500 returned +332%. 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. Coverage spans common stocks listed on US exchanges — chiefly the NYSE and NASDAQ, with a small number on NYSE American and OTC. We normalize figures — including currency conversion to a common basis — so companies can be compared like-for-like across up to 30 years. We refresh prices every market day and fundamentals as companies report quarterly earnings. 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.
