April 24, 2025
I evaluated candidates using the following metrics: strong corporate fundamentals, a wide economic moat, dividend consistency, economic resilience, a long-term outlook, sector diversity, and a global perspective. All companies must trade in the US (including on the OTC market) as well as on their domestic exchanges, ensuring accessibility for my portfolio.
My focus is on achieving “world-class quality” without regard for portfolio weighting or economic cyclicality. I did consider sector diversity and global representation to ensure a broad scope.
Candidates for my portfolio are selected based strictly on the quality of the company. For trading, I utilize technical analysis and various weighting metrics that include sector and regional considerations.
For portfolio trading, to be discussed separately, there are 100 candidates that I refer to as the Global Best 100 Companies. To find the best of the best, which is the purpose of this paper, candidates must have a market cap exceeding $30 billion (as of April 2025).
Quality Score Framework
- Corporate Fundamentals (20%): Strong balance sheet, consistent financial performance, clear strategic direction, sustainable cash flows.
- Wide Economic Moat (20%): Difficult-to-replicate business model, strong competitive advantages, dominant market position, high barriers to entry.
- Dividend Consistency (15%): Stable dividend payments, ability to increase dividends, sustainable payout ratio, reliable income generation.
- Economic Resiliency (10%): Performs well in challenging times, low sensitivity to cycles, essential services/products, and adaptability.
- Long-Term Outlook (20%): Positioned for success in 5-10 years, 7-8%+ total returns, ability to weather challenges, strategic positioning.
- Global Perspective (15%): Preference for non-US companies where possible, diverse geographical representation, international operations/impact.
- Sector Diversity (Informative): Representation across industries (not scored directly but ensures variety in selections).
Scoring Thresholds:
- 10/10: Perfect or near-perfect across all criteria, truly world-class with no significant weaknesses.
- 9.5/10: Exceptional across most criteria, with minor weaknesses (e.g., limited dividend history or slight resiliency concerns).
- 9/10: Outstanding but with a notable weakness in one area (e.g., no dividend, narrower global impact).
The Best Four
10/10 Quality Score (Perfect World-Class)
These companies are flawless across all criteria, with market caps well above $30 billion.
- Microsoft (MSFT) – United States
- Sector: Technology
- Market Cap: $2,876.8 billion (April 24, 2025)
- Criteria: Strong fundamentals ($413 billion revenue), wide moat (enterprise software, cloud), consistent dividends (~0.8%, 20+ years), high Resiliency, excellent long-term Outlook (8-10% returns via AI/cloud), global reach (190+ countries).
- Trades: NYSE (MSFT) in the US, OTC globally.
- Score: 10/10 – No weaknesses; a global tech leader.
- Nestlé (NSRGY) – Switzerland
- Sector: Consumer Staples
- Market Cap: ~$280 billion (based on historical data and growth trends.
- Criteria: Strong fundamentals (CHF 126 billion revenue), wide moat (global brands), consistent dividends (~3%, 25+ years), high Resiliency, solid long-term Outlook (7-8% returns), global reach (186 countries).
- Trades: OTC (NSRGY) in the US, SIX Swiss Exchange (NESN) domestically.
- Score: 10/10 – Exemplary in all areas.
- Visa (V) – United States
- Sector: Financials
- Market Cap: ~$654.2 billion (April 24, 2025).
- Criteria: Stellar fundamentals ($32 billion revenue), wide moat (payment network duopoly), consistent dividends (~0.8%, 15+ years), high resiliency, strong long-term outlook (8-10% returns), global reach (200+ countries).
- Trades: NYSE (V) in the US, OTC globally.
- Score: 10/10 – No weaknesses; a global financial leader.
- Johnson & Johnson (JNJ) – United States
- Sector: Healthcare
- Market Cap: ~$372.2 billion (April 24, 2025).
- Criteria: Strong fundamentals ($85 billion revenue), wide moat (pharma and medical devices), consistent dividends (~3%, 60+ years), high Resiliency (healthcare is essential), strong long-term Outlook (7-8% returns via innovation), global reach (175+ countries).
- Trades: NYSE (JNJ) in the US, OTC globally.
- Score: 10/10 – A healthcare giant with no significant flaws.
The second Best Four
9.5/10 Quality Score (Near-Perfect)
These companies are exceptional but have a minor weakness.
- MercadoLibre (MELI) – Argentina
- Sector: Consumer Discretionary
- Market Cap: $111.0 billion (April 24, 2025), well above $30 billion.
- Criteria: Strong fundamentals (49% stock price growth), wide moat (e-commerce/fintech ecosystem), no dividend (minor weakness), moderate resiliency, exceptional long-term outlook (8-10% returns), strong global impact (18 countries).
- Trades: NASDAQ (MELI) in the US, Buenos Aires Stock Exchange (MELI) domestically.
- Score: 9.5/10 – Lack of dividend is the only flaw.
- Taiwan Semiconductor (TSM) – Taiwan
- Sector: Technology
- Market Cap: $848.6 billion (April 24, 2025).
- Criteria: Strong fundamentals ($75 billion revenue), wide moat (60% foundry market share), modest dividends (~1.5%), moderate Resiliency (semiconductor cyclicality), strong long-term Outlook (8-10% returns), global reach (supplies Apple, Nvidia).
- Trades: NYSE (TSM) in the US, Taiwan Stock Exchange (2330) domestically.
- Score: 9.5/10 – Slight Resiliency concern due to cyclicality.
- LVMH (LVMUY) – France
- Sector: Consumer Discretionary
- Market Cap: ~$281.7 billion (April 24, 2025).
- Criteria: Strong fundamentals (€86 billion revenue), wide moat (luxury brands), consistent dividends (~2%), moderate resiliency (luxury is discretionary), strong long-term Outlook (7-8% returns), global reach (70+ countries).
- Trades: OTC (LVMUY) in the US, Euronext Paris (MC) domestically.
- Score: 9.5/10 – Minor resiliency concern due to discretionary sector.
- Samsung Electronics (SSNLF) – South Korea
- Sector: Technology
- Market Cap: ~$253.5 billion (April 24, 2025).
- Criteria: Strong fundamentals (diversified revenue from chips, smartphones), wide moat (leadership in semiconductors), consistent dividends (~2%), moderate resiliency (tech cyclicality), strong long-term outlook (7-8% returns), global reach (major player in 80+ countries).
- Trades: OTC (SSNLF) in the US, Korea Exchange (005930) domestically.
- Score: 9.5/10 – Slight Resiliency concern due to tech sector cyclicality.
Made the Top 16
9/10 Quality Score (Outstanding with One Weakness)
These companies are excellent, but they have a notable weakness.
- Fomento Económico Mexicano (FMX) – Mexico
- Sector: Consumer Staples
- Score: 9/10 – Global impact is slightly less broad than Nestlé.
- Canadian National Railway (CNI) – Canada
- Sector: Industrials
- Score: 9/10 – Global impact is more regional.
- América Móvil (AMX) – Mexico
- Sector: Communication & Media
- Score: 9/10 – Global impact is more regional.
- Toyota (TM) – Japan
- Sector: Consumer Discretionary
- Score: 9/10 – Resiliency slightly lower due to automotive cyclicality.
- Tencent Holdings (TCEHY) – China
- Sector: Communication & Media
- Score: 9/10 – Modest dividend and regional focus (Asia-heavy) are minor weaknesses.
- Unilever (UL) – United Kingdom
- Sector: Consumer Staples
- Score: 9/10 – Slightly less dominant in consumer staples compared to Nestlé.
- ASML Holding (ASML) – Netherlands
- Sector: Technology
- Score: 9/10 – Resiliency slightly lower due to tech cyclicality.
- Reliance Industries (RELIANCE) – India
- Sector: Energy (Conglomerate)
- Score: 9/10 – Modest dividend and energy sector exposure are minor weaknesses.
Summary of Results
- 10/10 (Perfect World-Class):
- Microsoft (MSFT) – US, Technology
- Nestlé (NSRGY) – Switzerland, Consumer Staples
- Visa (V) – US, Financials
- Johnson & Johnson (JNJ) – US, Healthcare
- 9.5/10 (Near-Perfect):
- MercadoLibre (MELI) – Argentina, Consumer Discretionary
- Taiwan Semiconductor (TSM) – Taiwan, Technology
- LVMH (LVMUY) – France, Consumer Discretionary
- Samsung Electronics (SSNLF) – South Korea, Technology
- 9/10 (Outstanding with One Weakness):
- Fomento Económico Mexicano (FMX) – Mexico, Consumer Staples
- Canadian National Railway (CNI) – Canada, Industrials
- América Móvil (AMX) – Mexico, Communication & Media
- Toyota (TM) – Japan, Consumer Discretionary
- Tencent Holdings (TCEHY) – China, Communication & Media
- Unilever (UL) – UK, Consumer Staples
- ASML Holding (ASML) – Netherlands, Technology
- Reliance Industries (RELIANCE) – India, Energy
This list encompasses a diverse set of world-class companies with market capitalizations exceeding $30 billion, striking a balance between growth, stability, and global impact, with shares trading in both the US and the domestic markets of non-US companies.
Comments
Most American retail investors would be surprised to learn that only three US-headquartered companies made the list of 16, and that the Technology sector was represented by only four of the 16.
- Geographic Representation: US (3), Switzerland (1), Argentina (1), Taiwan (1), France (1), South Korea (1), Mexico (2), Canada (1), Japan (1), China (1), UK (1), Netherlands (1), India (1).
- Sector Representation: Technology (4), Consumer Staples (3), Consumer Discretionary (3), Financials (1), Healthcare (1), Industrials (1), Communication & Media (2), Energy (1). No Energy, Utilities, or Real Estate.