Is HOV a high-quality business?

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

What is Hovnanian Enterprises, Inc.'s AlphaQuality grade?

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

HOV - Hovnanian Enterprises, Inc.

Price: -- -- | CONSENSUS: Hold DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Cyclical & Capital-Intensive

AlphaQuality — archetype-weighted quantitative grade

C- 48.6 / 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- 50.2

5yr Avg ROIC 11.2% 66/100
Operating Margin Trend -1.31 pp/yr 14/100

Capital Efficiency

Weight: 15%

A- 86.3

5yr Avg ROE 32.4% 100/100
5yr Share-Count CAGR 0.2% 61/100

Growth Quality

Weight: 10%

D- 27.4

5yr Revenue CAGR 1.7% 34/100
5yr EPS CAGR -45.8% 0/100
Revenue-Growth Years (5) 3/5 60/100

Cash Generation

Weight: 15%

B 74.6

5yr FCF Margin 6.2% 55/100
5yr FCF/NI Conversion 1.07x 99/100

Balance Sheet

Weight: 25%

D- 29.2

Net Debt / EBITDA 5.06x 15/100
Interest Coverage (EBIT/Int) 3.43x 49/100
Altman Z-Score 1.65 31/100

Stability

Weight: 20%

D 35.0

EPS Volatility (σ/μ) 1.07 0/100
Piotroski F-Score 6 67/100
Negative-Revenue Years (5) 2/5 60/100

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

Holders: 1 -1
Avg Δ position: +16.8%
New buys: 0
Full exits: 1

Wood sold -100%
Cooperman increased +17%

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.