US Value Stocks — High Operating Margin, High ROCE, Low Debt on NYSE & NASDAQ

About This Screen

True value investing is not just about finding cheap stocks — it is about finding high-quality businesses trading at prices that do not fully reflect their intrinsic worth. This screen operationalises that principle by filtering for three pillars of business quality simultaneously: strong operating profitability, efficient capital deployment, and conservative financial leverage. Companies that score well on all three dimensions are typically businesses with durable competitive advantages, pricing power, and the ability to generate cash across economic cycles.

The Operating Profit Margin (OPM) filter requires a value above 15%, meaning the company earns at least 15 cents of operating profit for every dollar of revenue after accounting for cost of goods sold and operating expenses. This filter eliminates commodity businesses, thin-margin distributors, and capital-intensive industries where pricing power is minimal. The ROCE (Return on Capital Employed) filter also requires above 15%, ensuring that the company is deploying its total capital base — equity plus debt — productively. ROCE is arguably a more holistic efficiency measure than ROE because it is not inflated by leverage.

The Debt-to-Equity filter (below 0.5) ensures that the high ROCE and margins being observed are not propped up by excessive borrowing. A company with D/E of 3x and a 15% ROCE might look attractive in isolation, but its returns are heavily dependent on the stability of cheap debt — when interest rates rise or credit markets tighten, such companies face significant earnings risk. Low-leverage, high-return businesses are inherently more resilient through market cycles.

This screen naturally gravitates toward asset-light business models: software, financial services, consumer brands, specialty chemicals, and professional services. These sectors often have the combination of high margins, high ROCE, and low capital requirements that make debt financing unnecessary. Finding names where the quality is underappreciated (relatively low P/E despite strong margins and ROCE) is the core objective. Data updates daily.