PT - JOURNAL ARTICLE AU - Andrew L. Berkin AU - Larry E. Swedroe TI - Combining Value and Profitability Factors to Improve Performance AID - 10.3905/jbis.2022.1.002 DP - 2022 Aug 31 TA - The Journal of Beta Investment Strategies PG - 31--47 VI - 13 IP - 3 4099 - https://pm-research.com/content/13/3/31.short 4100 - https://pm-research.com/content/13/3/31.full AB - The value and profitability factors are widely used by both academics and practitioners. Studies of their properties have tended to focus on them separately. This article considers the results of combining these two factors. We find that portfolios formed on the intersection of stocks with both high value and profitability characteristics outperform portfolios with moderate characteristics, which in turn outperform portfolios of stocks with low characteristics. These results are persistent, pervasive, robust, investable, and intuitive, giving us greater faith in their continuing efficacy. We also show that, in contrast to the traditional value measure of book to market, value metrics using earnings and cash flow provide significant exposure to profitability and thus act as a useful complement.