Is AVY a high-quality business?

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

What is Avery Dennison Corporation's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to AVY 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 AVY 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.

AVY - Avery Dennison Corporation

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $214.75 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Cyclical & Capital-Intensive

AlphaQuality — archetype-weighted quantitative grade

B 69.1 / 100 composite

Composite Grade

Composite of six pillars weighted for cyclical & capital-intensive businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

B- 68.2

5yr Avg ROIC 12.7% 72/100
Operating Margin Trend +0.12 pp/yr 59/100

Capital Efficiency

Weight: 15%

A+ 95.5

5yr Avg ROE 30.3% 100/100
5yr Share-Count CAGR -2.0% 87/100

Growth Quality

Weight: 10%

D 36.8

5yr Revenue CAGR 1.3% 31/100
5yr EPS CAGR -0.1% 20/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 15%

B+ 78.7

5yr FCF Margin 7.9% 62/100
5yr FCF/NI Conversion 1.01x 100/100

Balance Sheet

Weight: 25%

B 69.7

Net Debt / EBITDA 2.71x 56/100
Interest Coverage (EBIT/Int) 7.83x 76/100
Altman Z-Score 3.44 87/100

Stability

Weight: 20%

C+ 58.5

EPS Volatility (σ/μ) 0.42 41/100
Piotroski F-Score 6 67/100
Negative-Revenue Years (5) 1/5 80/100

3 of 3 gurus held; 3 trimmed.

Holders: 3
Avg Δ position: -33.1%
New buys: 0
Full exits: 0

Cooperman decreased -91%
Dalio decreased -8%
Greenblatt decreased -1%

How this is calculated

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

Profitability (15%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (10%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (25%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (20%) — 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.