Key Statistics

EV/EBIT = 20.2x

ROE = 12.92%

Debt/Equity = 81%

FCF Yield = 5.2%

Dividend Yield = 2.14%

Market Cap = $66.79 billion

The Company

PACCAR (PCAR) is best known as…

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Key Statistics

EV/EBIT = 32.34x

ROE = 71.91%

Debt/Equity = 1231%

FCF Yield = 4.2%

Dividend Yield = 3.9%

Market Cap = $85.37 billion

The Company

American Tower Corporat…

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Key Statistics

EV/EBIT = 31.9x

ROE = 10.65%

Debt/Equity = 60%

FCF Yield = 2.2%

Dividend Yield = .49%

Market Cap = $38.09 billion

The Company

Martin Marietta Materials (MLM) i…

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Key Statistics

EV/EBIT = 9.7x

ROE = 49.4%

Debt/Equity = 90%

FCF Yield = 8.4%

Dividend Yield = 8.8%*

Market Cap = $2.56 billion

*The high trailing twelve month divid…

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Key Statistics

EV/EBIT = 12.88x

ROE = N/A*

Debt/Equity = N/A*

FCF Yield = 7.9%

Dividend Yield = 6.4%

Market Cap = $111.6 billion

*Altria has more debts than assets.

The Compa…

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Key Statistics

EV/EBIT = 18.7x

ROE = 34.33%

Debt/Equity = N/A*

FCF Yield = 2.6%

Dividend Yield = 0%

Market Cap = $54.6 billion

*Autozone has more liabilities than assets

The…

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Key Statistics

EV/EBIT = 26.1x

ROE = 8.92%

Debt/Equity = 24%

FCF Yield = 3.4%

Dividend Yield = 0%

Market Cap = $29.94 billion

The Company

Teledyne Technologies (TDY) is a …

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Key Statistics

EV/EBIT = 13.2x

ROE = 40.72%

Debt/Equity = 12%

FCF Yield = 5.5%

Dividend Yield = 0%

Market Cap = $3.34 billion

The Company

National Beverage Corp. (FIZZ) is a…

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Key Statistics

EV/EBIT = 18x

ROE = 42.43%

Debt/Equity = 151%

FCF Yield = 3.9%

Dividend Yield = 1.4%

Market Cap = $40.71 billion

The Company

eBay Inc. (EB…

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Key Statistics

EV/EBIT = 13.6x

ROE = 17.14%

Debt/Equity = 153%

FCF Yield = 3.8%

Dividend Yield = 4.9%

Market Cap = $55 billion

The Company

ONEOK (OKE) is a major U.S. midstream…

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Key Statistics

EV/EBIT = 15.6x

ROE = 73.8%

Debt/Equity = 70%

FCF Yield = 5.6%

Dividend Yield = 3.2%

Market Cap = $85.48 billion

The Company

Automatic Data Processing (…

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Mark Mahaney was an early analyst of internet companies in the late ‘90s and has continued to invest in these companies over the decades.

The book is interesting because it’s a real world account of a growth investor who endured both the internet bubble & financial crisis and has still put together a strong track record.

The book is structured into 10 individual lessons for tech oriented growth investors, which Matt & I go through on this podcast, one by one.

Links:

1. Nothing But Net: 10 Timeless Stock Picking Lessons from one of Wall Street’s Top Tech Analysts: https://www.amazon.com/Nothing-But-Net-Timeless-Stock-Picking-ebook/dp/B09889SCSY/

Disclaimer

Nothing on this substack is investment advice.

The information in this article is for information and discussion purposes only. It does not constitute a recommendation to purchase or sell any financial instruments or other products. Investment decisions should not be made with this article and one should take into account the investment objectives or financial situation of any particular person or institution.

Investors should obtain advice based on their own individual circumstances from their own tax, financial, legal, and other advisers about the risks and merits of any transaction before making an investment decision, and only make such decisions on the basis of the investor’s own objectives, experience, and resources.

The information contained in this article is based on generally-available information and, although obtained from sources believed to be reliable, its accuracy and completeness cannot be assured, and such information may be incomplete or condensed.

Investments in financial instruments or other products carry significant risk, including the possible total loss of the principal amount invested. This article and its author do not purport to identify all the risks or material considerations that may be associated with entering into any transaction. This author accepts no liability for any loss (whether direct, indirect, or consequential) that may arise from any use of the information contained in or derived from this website.

Key Statistics

EV/EBIT = 37x

ROE = 18.6%

Debt/Equity = 28%

FCF Yield = 1.9%

Dividend Yield = .38%

Market Cap = $23.22 billion

The Company

Woodward (WWD) is a company that mo…

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Key Statistics

EV/EBIT = 46x

ROE = 31.7%

Debt/Equity = 0%

FCF Yield = 2.3%

Dividend Yield = 0%

Market Cap = $178.48 billion

The Company

Arista Networks (ANET) sells high-performance n…

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Key Statistics

EV/EBIT = 27x

ROE = 27.3%

Debt/Equity = 75%

FCF Yield = 2.9%

Dividend Yield = .78%

Market Cap = $117.02 billion

The Company

Parker-Hannifin (PH) operates ma…

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Key Statistics

EV/EBIT = 27.7x

ROE = 34.32%

Debt/Equity = 81%

FCF Yield = 3.9%

Dividend Yield = 1.4%

Market Cap = $20.81 billion

The Company

C.H. Robinson Worldwide (CHR…

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Key Statistics

EV/EBIT = 17.2x

ROE = 28.6%

Debt/Equity = 141%

FCF Yield = 4.6%

Dividend Yield = 1.9%

Market Cap = $91.15 billion

The Company

Marsh & McLennan (MMC) is a global …

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Last year, I introduced the stock list—a culmination of this site’s work analyzing companies one by one through fundamental security analysis. The goal was to build a universe of businesses that meet my criteria for being truly wonderful companies.

From there, I layered in a quantitative screen, focusing on companies whose forward earnings yield (and EBIT/EV yield) exceeds the 10-year Treasury. I then rank these names by the size of their discount to their five-year average price-to-sales multiple.

After narrowing the universe using that benchmark, I track the performance of a group of 15 stocks over the course of the year. This is my attempt to apply a disciplined, quantitative framework to what is otherwise a fundamentally driven research process.

The objective is simple: own the cheapest companies within a high-quality universe. The approach is similar in spirit to the Magic Formula, but with a stronger qualitative foundation and a broader set of valuation metrics than a single factor.

By measuring the performance of this group, I hope to gain insight into whether this process is actually adding value. For more active investors, the list also serves as a starting point—15 companies worthy of deeper, independent research.

I’ll publish the performance results of last year’s list next weekend. For now, I wanted to share an update on which companies will make up the list for the coming year.

The 2026 Stock List

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Key Statistics

EV/EBIT = 21.5x

ROE = 14.9%

Debt/Equity = 54%

FCF Yield = 4.7%

Dividend Yield = .66%

Market Cap = $8.08 billion

The Company

Valmont Industries (VMI) is a global ma…

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