Is KMT a high-quality business?

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

What is Kennametal Inc.'s AlphaQuality grade?

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

KMT - Kennametal Inc.

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $37.50 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

C+ 60.1 / 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- 47.7

5yr Avg ROIC 6.7% 43/100
Operating Margin Trend +0.09 pp/yr 58/100

Capital Efficiency

Weight: 15%

B- 63.4

5yr Avg ROE 8.1% 50/100
5yr Share-Count CAGR -2.0% 87/100

Growth Quality

Weight: 15%

C 54.8

5yr Revenue CAGR 1.7% 34/100
5yr EPS CAGR 16.6% 90/100
Revenue-Growth Years (5) 2/5 40/100

Cash Generation

Weight: 15%

B 72.9

5yr FCF Margin 6.5% 56/100
5yr FCF/NI Conversion 1.36x 94/100

Balance Sheet

Weight: 20%

B+ 75.3

Net Debt / EBITDA 1.71x 74/100
Interest Coverage (EBIT/Int) 6.29x 70/100
Altman Z-Score 3.23 83/100

Stability

Weight: 15%

C- 46.2

EPS Volatility (σ/μ) 0.52 29/100
Piotroski F-Score 7 78/100
Negative-Revenue Years (5) 3/5 40/100

5 of 5 gurus held; 2 new buys; 2 added; 1 trimmed.

Holders: 5 +3
Avg Δ position: +16.7%
New buys: 2
Full exits: 0

Dalio new
Laffont new
Wood increased +33%

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.