There are a lot of factors and data we take into consideration when assigning a Rating, but all of that can be categorized into two main sub-ratings:

Risk Rating - Primarily based on the level of volatility in the stock’s daily, monthly and quarterly returns, and on the company’s financial stability. Stocks with very stable returns are considered less risky and receive a higher risk rating. Stocks with greater volatility are considered riskier, and will receive a lower risk rating.

Companies with poor financial stability are considered riskier investments than those that are financially stable.

Reward Rating – Primarily based on a stock’s total return to shareholders over the trailing five years, and also based on sales, net income, earnings trends, and anticipated dividends (its prospects for future returns).

In addition to this, based on the stock’s current price, we also factor in other important ratios.

This is all then run through our proprietary modeling, with the individual components of the risk and reward ratings calculated and weighted, and the final rating is generated.

You can see risk and reward ratings by clicking on each stock’s “Summary” tab.