We have Health Score data on 3,884 stocks. Here's what the distribution reveals about who's really winning in 2026.
The median sits right around the midpoint of the scale. Half of all stocks can't clear that bar. And the top 8% are doing the heavy lifting that most investors assume the whole market is doing.
What the health score distribution tells us about the market
The Stoxcraft Health Score measures sector-relative fundamental quality. Across 3,884 stocks, the distribution skews left: most companies cluster in the mediocre-to-average range, while the top tier is genuinely rare.
Why most stocks stay stuck in the middle
The bulk of the universe lands between 3.5 and 6.5 on a 10-point scale. These companies generate enough revenue to stay public, but not enough free cash flow or margin strength to stand out. They're surviving, not compounding.
Why only 8% reach the top tier
To get there, a company needs consistent strength across leverage, liquidity, profitability, and cash flow simultaneously. One strong metric doesn't move the needle. It takes all four pulling in the same direction. Out of 3,884 stocks, that's roughly 311 names.
Which sectors lead and which are under stress in 2026
The distribution isn't uniform. Where a company operates shapes its entire health score profile.
Industrials and Healthcare dominate the upper quartile
Both sectors produce businesses with predictable cash flows, disciplined leverage, and multi-year revenue visibility. Industrials benefit from long-cycle contracts and high switching costs. Healthcare, particularly medical devices and specialty pharma, generates sticky demand regardless of macro conditions. These aren't the flashiest sectors. They're the ones that keep showing up at the top of fundamental screens.
Consumer Discretionary has the most stress-zone stocks
The sector carries the highest concentration of low-scoring names. Elevated consumer debt, softer big-ticket spending, and margin pressure have pushed many companies into the lower quartile. The weakest are burning cash flow to defend market share while carrying leverage that no longer makes sense.
What screening by health score actually filters out
A portfolio built from the top 25% by health would be overweight Industrials and Healthcare. Consumer Discretionary exposure drops sharply. Technology still appears, but only the profitable subset with strong free cash flow. The unprofitable growth names wash out immediately.
According to research from S&P Global Market Intelligence, portfolios screened on composite fundamental quality have historically generated excess returns over market-cap-weighted benchmarks across both developed and emerging markets.
The 8% rule: what the top of the health distribution looks like
These companies consistently generate sector-leading free cash flow, carry below-median net debt, and maintain liquidity ratios that hold through down cycles. MSCI research shows that companies with deteriorating fundamental quality underperform sector benchmarks over 3 to 5 year periods, particularly during tightening financial conditions. The 2025 to 2026 rate environment has confirmed that pattern.
You can explore which stocks currently sit in the top tier using the Stoxcraft screener. The Stoxcraft scoring system blog explains how sector-relative health scoring works and why it produces more useful comparisons than raw financial ratios.
