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28 February 2019
By Maynard Paton
For this SharePad search I screened for companies that exhibited an extended history of high margins and high returns on equity (ROE).
To narrow the field down further, I required my shortlisted companies to possess cash-positive balance sheets.
The exact criteria I used were:
- An average 10-year EBIT margin of 20% or more;
- An average 10-year ROE of 20% or more, and;
- Net borrowing of zero or less (i.e. a net cash position).
I selected Hargreaves Lansdown from the 24 matches because this company:
- was the largest on the shortlist;
- offers services used by many private investors, and;
- prompts different opinions from quality investors Terry Smith and Nick Train.