Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Goldcorp (NYSE: GG) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

  • Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
  • Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
  • Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
  • Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
  • Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
  • Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Goldcorp.

Factor

What We Want to See

Actual

Pass or Fail?

Growth 5-Year Annual Revenue Growth > 15% 32.3% Pass
  1-Year Revenue Growth > 12% 52.6% Pass
Margins Gross Margin > 35% 61.8% Pass
  Net Margin > 15% 46.0% Pass
Balance Sheet Debt to Equity < 50% 46.0% Pass
  Current Ratio > 1.3 2.34 Pass
Opportunities Return on Equity > 15% 10.1% Fail
Valuation Normalized P/E < 20 50.14 Fail
Dividends Current Yield > 2% 0.9% Fail
  5-Year Dividend Growth > 10% 2.8% Fail
       
  Total Score   6 out of 10

Source: Capital IQ, a division of Standard and Poor's. Total score = number of passes.

With a score of 6, Goldcorp looks pretty shiny. The company has bucked the downward trend for miners recently and appears poised to take advantage of high gold prices as long as they last.

Unless you've been hiding under a rock, you probably know about gold's explosive run to record highs above $1,500. During the 10-year bull market in gold, Goldcorp has combined a knack for smart acquisitions with strong organic growth in pursuit of big production growth.

With gold hitting new highs, many gold miners haven't followed suit. Newmont Mining (NYSE: NEM), Barrick Gold (NYSE: ABX), and Freeport-McMoRan (NYSE: FCX) were all down substantially for the year even before the bottom fell out of the precious-metals complex last week. Taseko Mines (AMEX: TGB) is up for the year, but has fallen sharply since March despite strength in bullion. Perhaps due to substantial silver production at its Penasquito mine, though, Goldcorp has thus far bucked the trend to maintain a small gain.

The obvious question for Goldcorp is what happens next to gold bullion prices. With a huge debate between bulls who see potential for massive future gains and bears looking for a continued collapse, the only thing that's certain is that Goldcorp will do its best to reach perfection in whatever price environment it has to deal with.

Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.

Click here to add Goldcorp to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Finding the perfect stock is only one piece of a successful investment strategy. Get the big picture by taking a look at our 13 Steps to Investing Foolishly.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned in this article. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.