Is AES a high-quality business?

AlphaMadera's AlphaQuality grade scores The AES Corporation on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how AES compares to a Buffett-style quality bar.

What is The AES Corporation's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to AES based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes AES a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

AES - The AES Corporation

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $18.25 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

F 25.7 / 100 pillar composite

Composite Grade

Composite of six pillars weighted for stable earnings power businesses. Purely quantitative — no stock price or analyst input.

⚠ 2 of the last 5 fiscal years showed negative net income — AlphaQuality will not grade above F for persistent unprofitability in a stable earnings power business.

Grade overrides the 25.7 pillar composite because hard gates always win. Use the pillar breakdown below to see where the underlying numbers sit.

Profitability

Weight: 20%

F 20.9

5yr Avg ROIC 3.2% 26/100
Operating Margin Trend -1.55 pp/yr 9/100

Capital Efficiency

Weight: 15%

D 37.4

5yr Avg ROE 5.6% 38/100
5yr Share-Count CAGR 1.7% 36/100

Growth Quality

Weight: 15%

B- 64.9

5yr Revenue CAGR 2.4% 40/100
5yr EPS CAGR 89.7% 100/100
Revenue-Growth Years (5) 3/5 60/100

Cash Generation

Weight: 15%

F 0.0

5yr FCF Margin -20.9% 0/100
5yr FCF/NI Conversion -7.95x 0/100

Balance Sheet

Weight: 20%

F 6.0

Net Debt / EBITDA 9.55x 0/100
Interest Coverage (EBIT/Int) 1.05x 14/100
Altman Z-Score 0.49 7/100

Stability

Weight: 15%

D 33.5

EPS Volatility (σ/μ) 0.90 4/100
Piotroski F-Score 5 56/100
Negative-Revenue Years (5) 2/5 60/100

6 of 6 gurus held; 2 new buys; 1 added; 3 trimmed.

Holders: 6 +2
Avg Δ position: -22.6%
New buys: 2
Full exits: 0

Soros new
Laffont new
Cooperman decreased -68%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (20%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (15%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (20%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (15%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.