What is a typical stable company (company in stable phase)

CFA General
#1

Could you share your idea what is a typical stable company (company in stable phase). How is its characteristics in both business and finance (how ROE compare to cost of equity, ROIC compare to WACC….)

Thanks

#2

Like, going concerns? https://en.wikipedia.org/wiki/Going_concern

Or like, mature companies that grow in line with gdp? Things that come to mind are utilities, or laundry detergents. No clue what their returns would be on average, but their growth would be limited significantly. Buffett and value investors tend to like utilities because they offer very stable returns. I’m not sure but I’d imagine they’d have a tendency towards mergers in the industry towards only a few dominant companies, because thats the only way to expand.

http://www.inc.com/encyclopedia/industry-life-cycle.html

Other examples may be drugs, which pharmaceutical companies may roll over in to new drugs with new patents with minor or negligible tweeks, with only the purpose of getting a longer patent, so they’re the only ones that would be producing some cash cow drug.

#3

Naturally part of a stable company. Just not sure about the fundamentals.

#TheMoreYouKnow

#4

Helpful as always, hashtag

#5

#hashtagKnows