Is DHI a high-quality business?

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

What is D.R. Horton, Inc.'s AlphaQuality grade?

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

DHI - D.R. Horton, Inc.

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $163.86 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Cyclical & Capital-Intensive

AlphaQuality — archetype-weighted quantitative grade

B- 67.5 / 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%

C 56.9

5yr Avg ROIC 15.3% 81/100
Operating Margin Trend -1.94 pp/yr 1/100

Capital Efficiency

Weight: 15%

A 92.6

5yr Avg ROE 19.1% 90/100
5yr Share-Count CAGR -4.1% 98/100

Growth Quality

Weight: 10%

C 51.6

5yr Revenue CAGR 5.4% 62/100
5yr EPS CAGR 0.3% 22/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 15%

C- 49.1

5yr FCF Margin 5.8% 53/100
5yr FCF/NI Conversion 0.47x 44/100

Balance Sheet

Weight: 25%

A+ 94.9

Net Debt / EBITDA 0.63x 89/100
Interest Coverage (EBIT/Int) 30.00x 100/100
Altman Z-Score 5.67 100/100

Stability

Weight: 20%

D+ 43.9

EPS Volatility (σ/μ) 0.67 16/100
Piotroski F-Score 5 56/100
Negative-Revenue Years (5) 1/5 80/100

4 of 4 gurus held; 2 added; 2 trimmed; 1 full exit.

Holders: 4
Avg Δ position: +115.7%
New buys: 0
Full exits: 1

Druckenmiller sold -100%
Dalio increased +511%
Cooperman decreased -52%

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.