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Risk-Adjusted Returns Matter

Simply, Risk-Adjusted Returns help investors determine whether the risk to be taken is worth the expected reward. Find true value stocks with a margin of safety while avoiding value traps. Use our service to determine the "Risk-Profile" on over 3000 companies.

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"Top 5 Research Providers in the United States"

By Investars Ranks.com

Quantitative Category, 1 Year, All Ratings, 06-30-2024

  • Rank Number 1 Overall
  • Rank Number 1 Communications
  • Rank Number 1 Industrial
  • Rank Number 1 Sell Short
  • Rank Number 1 Materials
  • Rank Number 1 Technology
  • Rank Number 2 Consumer Discretionary
  • Rank Number 3 Financials

Owner Earnings Portfolio

Access to our model portfolio - designed and managed by our award-winning research team

High Conviction Buys & Sells

Start investing with High Conviction Buy and Sell recommendations updated weekly

Dividend Growth Stock Buys

The portfolio includes High Dividend Yield stocks that meet our Owner Earnings criteria

Sector and Cap Size Buys

Sector and Cap Size Buy recommendations

Unlimited Stock Reports

Owner Earnings analysis and risk profile by ticker on over 2,500 stocks

Custom Portfolio Review

Custom portfolio review - includes a Buy, Sell, or Neutral rating

Owner Earnings Approach

We evaluate companies based on a proprietary Owner Earnings model rather than an accounting profit model

We have analyzed every SEC filing, for every company, every quarter, for the last 25 years

Our process translates accounting earnings into cash-based earnings based on Owner Earnings adjustments to financial statements

Our models and portfolios are automatically updated weekly based on the latest 10-K and 10-Q filings

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Does Owner Earnings Work?

Our research shows that the key to Long-Term Sustainability is for a company to make an Owner Earnings.

Our Owner Earnings Model recommendations historically generate returns that outperform the S&P 500 results.

Cumulative Returns as of 12/31/19. Equal weighting, no options, no futures, no leverage.

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Why Owner Earnings Works

Accounting profit, also known as net income, is one of the most widely watched metrics in evaluating the financial health of a company. It's the profit after various costs are subtracted from total revenue as stipulated by generally accepted accounting principles (GAAP). However, the cost of equity capital is not included in this calculation. Wall Street treats equity capital for free.

The metric we use to evaluate performance is Owner Earnings. Owner Earnings is similar to accounting profit in that it deducts various costs from revenue, but is different because it also includes the cost of equity capital. An important part of our Owner Earnings model is recognizing that access to equity capital is an expense and comes at a cost. In fact, costs of equity capital can and do vary with the overall sustainability risks of the company.

Simply, accounting profit does not account for all costs and any evaluation based on this method is incomplete. It is also a common knowledge that net income is easily manipulated by companies to manage earnings (i.e. paper profits).

Our research shows that the best way to evaluate the true success of a company is using an Owner Earnings approach. Companies that continuously generate Owner Earnings achieve long-term success, and that success will be recognized by our Owner Earnings analysis.

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What Investors Are Saying About Us...

Using McLean Equity Research Owner Earnings model helped me value companies based on the underlying cash flow of the business.

Oleg B.

Individual Investor
When comparing two or more potential investments, McLean Equity Research helps to make difficult Risk / Reward trade off decision.

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