RT Journal Article
T1 How to improve quality investing
A1 Otero González, Luis
A1 Durán Santomil, Pablo
A1 Vieito, João Paulo da Torre
A1 Reboredo Nogueira, Juan Carlos
K1 Quality investing
K1 Economic Moat
K1 ESG
K1 Analyst forecast
K1 Performance
AB In this article, we evaluate the relationship between quality investing combined with Economic Moat, ESG (Environmental, Social and Governance) and analyst opinions over the period 2014–2020 based on a data set comprising 803 US stocks. Performance is evaluated using several metrics (returns and alphas). Our results show that quality stocks measured by return on invested capital (ROIC) exhibit superior performance. The incorporation of competitive advantages allows a better discrimination among the classic high-quality strategies. Investment in stocks with quality and high ESG entails the payment of a premium but buying quality companies with Economic Moat makes up for this negative aspect. The results show how quality companies that have competitive advantages obtain a better future performance and are recognized by the market with a higher valuation. However, the markets may take time to recognize this value since the incorporation of the average Price-to-Price target (Analyst consensus) increases the future performance.
PB SAGE Publications
SN 2340-9444
YR 2025
FD 2025
LK https://hdl.handle.net/10347/41653
UL https://hdl.handle.net/10347/41653
LA eng
NO Otero González, L., Durán Santomil, P., Vieito, J. P. da T., & Reboredo, J. C. (2023). How to improve quality investing. BRQ Business Research Quarterly, 28(2), 453-473. https://doi.org/10.1177/23409444231202810 (Original work published 2025)
NO The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: We acknowledge the funding of: (1) the Galician Regional Government [ED431C 2020/18] co-funded by the European Regional Development Fund (ERDF/FEDER) for the period 2020–2023 and (2) the Ministry of Economy and Competitivity (PID2021-1243360B-100).
DS Minerva
RD 24 abr 2026