Is HTO a high-quality business?

AlphaMadera's AlphaQuality grade scores H2O America on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how HTO compares to a Buffett-style quality bar.

What is H2O America's AlphaQuality grade?

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

HTO - H2O America

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $61.80 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

D+ 39.3 / 100 composite

Composite Grade

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

Profitability

Weight: 20%

C- 45.1

5yr Avg ROIC 4.1% 30/100
Operating Margin Trend +0.81 pp/yr 79/100

Capital Efficiency

Weight: 15%

F 24.4

5yr Avg ROE 5.4% 37/100
5yr Share-Count CAGR 4.9% 1/100

Growth Quality

Weight: 15%

A- 80.6

5yr Revenue CAGR 8.7% 77/100
5yr EPS CAGR 9.5% 75/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 15%

F 0.0

5yr FCF Margin -21.7% 0/100
5yr FCF/NI Conversion -1.79x 0/100

Balance Sheet

Weight: 20%

F 15.9

Net Debt / EBITDA 6.09x 7/100
Interest Coverage (EBIT/Int) 2.26x 33/100
Altman Z-Score 0.80 12/100

Stability

Weight: 15%

B+ 75.3

EPS Volatility (σ/μ) 0.28 60/100
Piotroski F-Score 7 78/100
Negative-Revenue Years (5) 0/5 100/100

Not held by any curated guru.

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.