Is BTU a high-quality business?

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

What is Peabody Energy Corporation's AlphaQuality grade?

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

BTU - Peabody Energy Corporation

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $36.50 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Other Commodity Producers

AlphaQuality — archetype-weighted quantitative grade

C 54.9 / 100 composite

Composite Grade

Composite of six pillars weighted for other commodity producers businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

C 55.0

5yr Avg ROIC 14.6% 79/100
Operating Margin Trend -4.32 pp/yr 0/100

Capital Efficiency

Weight: 10%

B- 63.6

5yr Avg ROE 15.5% 81/100
5yr Share-Count CAGR 2.1% 31/100

Growth Quality

Weight: 5%

D 34.2

5yr Revenue CAGR 3.9% 51/100
5yr EPS CAGR -5.7% 9/100
Revenue-Growth Years (5) 2/5 40/100

Cash Generation

Weight: 25%

B 71.8

5yr FCF Margin 11.7% 74/100
5yr FCF/NI Conversion 0.71x 69/100

Balance Sheet

Weight: 25%

C 53.8

Net Debt / EBITDA -0.15x 96/100
Interest Coverage (EBIT/Int) 0.24x 3/100
Altman Z-Score 1.93 39/100

Stability

Weight: 20%

D 36.6

EPS Volatility (σ/μ) 0.45 37/100
Piotroski F-Score 3 33/100
Negative-Revenue Years (5) 3/5 40/100

4 of 4 gurus held; 1 added; 3 trimmed.

Holders: 4
Avg Δ position: -18.3%
New buys: 0
Full exits: 0

Dalio decreased -56%
Cooperman decreased -15%
Wood decreased -10%

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 (10%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (5%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (25%) — 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.