It is not the fastest growth that wins, but the steadiest at a fair price: GARP avoids deep-value risks and valuation bubbles alike.
Save the strategy and StockScorer checks its rules for you every day. You'll get a heads-up whenever a stock crosses the upper or lower score threshold.
MSCI World over the same period: +240.1 %
Past performance is not a reliable indicator of future results.
| Score | Number of stocks |
|---|---|
| -2 | 4,169 |
| -1 | 2,227 |
| 0 | 3,702 |
| +1 | 2,255 |
| +2 | 1,729 |
| +3 | 1,237 |
| +4 | 663 |
| +5 | 283 |
Every stock runs through the same disclosed rules. The points add up to a score, traceable down to the individual rule.
Each rule checks a metric against a threshold, for example ROE above 15 %.
You decide how much each rule counts: from +1 to +3 or −1 to −3.
The sum is the score. That gives three classes: high, medium, low match.
Thresholds vary by cap class.
These terms describe only the match with the criteria, not a recommendation to buy or sell.
10 to 25% per year over five years: the stability band earns the highest single score (+2).
The current P/E is measured against its own 5-year average, not against the market.
A return on equity above 15% ensures the growth is generated profitably.
PEG between 0 and 1.2, with no floor; above that growth gets too expensive.
These exact rules run over every stock daily.
After a free sign-up: the full profile in the rule editor to copy, adjust thresholds and save as your own starting profile.
See & copy all rulesThe backtest shows a total return of +278.4%. The MSCI World reaches +240.1% over the same period.
Survivorship-free since June 30, 2015: the index composition is applied point-in-time.
Historical period, quarterly rebalancing, no taxes or fees. Past performance is not a reliable indicator of future results.
Purely mechanical rule application, no curated-list effect: stocks with a high match can fall just like any other stock.
For long-term investors seeking the compromise: more dynamism than classic dividend stocks, less risk than hyper-growth. GARP stocks are rarely spectacular. That is exactly the idea.
GARP (growth at a reasonable price) is the middle path between the extremes: deep value leans into low prices and risks structurally sick companies; pure growth leans into dynamism and risks valuation bubbles. The balanced GARP model demands both in moderation: steady earnings growth of 10 to 25% per year (fast enough for real compounding, slow enough to be sustainable), a P/E below its own 5-year average and a PEG in the fair window. Extremely low PEGs are deliberately not rewarded: they often point to cyclical earnings peaks whose growth will not repeat.
Four building blocks form the score: earnings growth of 10 to 25% per year (5-year CAGR) earns +2. The stability band is deliberately the highest single score. A current P/E below its own 5-year average earns +1, a return on equity above 15% another +1, and a PEG between 0.5 and 1.2 one more point.
On the deduction side: declining or unstable earnings growth (negative 5-year trend, missing history or a recently fallen profit) costs one point, as does a PEG above 2 (or without a meaningful value). The upper threshold is 3 points for large caps and 4 for mid and small caps.
Historical valuation: current P/E below its own 5-year average (+1).
Earnings stability: 5-year CAGR between 10 and 25% (+2); negative trend, missing history or recently declining earnings (−1).
Profitability: return on equity above 15% (+1).
Valuation: PEG 0–1.2, no floor (+1); PEG above 2, negative or missing (−1).
The difference to the PEG strategy lies in the treatment of extremes: a PEG of 0.3 earns a dedicated extreme-undervaluation bonus there, while here it counts unremarkably within the whole 0-to-1.2 window. Since the fidelity round (23 August 2026) the PEG window no longer has a floor (previously 0.5 to 1.2): even very low PEGs score here, and the safety net against cyclical traps stays ga-03 (a deduction for recently declining profit), not a PEG minimum.
Absurdly low PEGs frequently occur in commodity and cyclical stocks at the end of a boom cycle, when the seemingly high growth is about to tip over. Documented deviation: the original criterion "EPS growth between 10 and 25% in every single year" cannot be mapped directly with annual data. StockScorer uses the 5-year CAGR band and adds a deduction when the most recent annual profit declined: together a good approximation of "steady rather than erratic".
For patient quality investors who want growth without paying for hope stocks, as a core strategy for the long-term portfolio.