Chuck Royce
Small companies with strong balance sheets and high returns.
| Measure | Formula | Median | Middle half | Reporting it |
|---|---|---|---|---|
| Return on capital employed | Operating income ÷ (equity + total debt) | 10.2% | 5.6% – 16.7% | 444 |
| Debt to equity | Total debt ÷ shareholders’ equity | 0.79x | 0.39x – 1.45x | 442 |
| Return on equity, sustained | Needs ten years of filings | — | — | — |
Where each comes from
| Return on capital employed | High returns on invested capital, the defining screen for what Royce has called premier quality. |
|---|---|
| Debt to equity | Little or no debt, described as what separates a durable small company from a fragile one. |
| Return on equity, sustained | Akre's first leg is a high return on equity held over time rather than in one good year. He publishes no number, so this checks how many of the last ten years cleared the median of every company here — that reading is ours, not his. |
Source: Royce Investment Partners commentaries on “premier quality” small-cap criteria.
What this cannot tell you
Size is central to the approach and is not one of the measures computed here; a large company can clear these checks and still be nothing he would look at.
This page describes a published method and applies its measures to filings. It is not a score, not a ranking and not a recommendation, and no page here aggregates these into a verdict. · All 11 metrics