Is PSX a high-quality business?

AlphaMadera's AlphaQuality grade scores Phillips 66 on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how PSX compares to a Buffett-style quality bar.

What is Phillips 66's AlphaQuality grade?

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

PSX - Phillips 66

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $168.22 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Oil & Gas E&P

AlphaQuality — archetype-weighted quantitative grade

B- 62.9 / 100 composite

Composite Grade

Composite of six pillars weighted for oil & gas e&p businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

B- 63.9

5yr Avg ROIC 12.2% 71/100
Operating Margin Trend -0.12 pp/yr 48/100

Capital Efficiency

Weight: 10%

A- 86.7

5yr Avg ROE 17.8% 87/100
5yr Share-Count CAGR -1.9% 87/100

Growth Quality

Weight: 5%

B- 67.4

5yr Revenue CAGR 4.2% 54/100
5yr EPS CAGR 38.1% 100/100
Revenue-Growth Years (5) 2/5 40/100

Cash Generation

Weight: 25%

B- 65.3

5yr FCF Margin 3.1% 41/100
5yr FCF/NI Conversion 1.26x 96/100

Balance Sheet

Weight: 25%

B 71.6

Net Debt / EBITDA 2.23x 65/100
Interest Coverage (EBIT/Int) 6.22x 70/100
Altman Z-Score 3.33 85/100

Stability

Weight: 20%

D 35.0

EPS Volatility (σ/μ) 0.64 18/100
Piotroski F-Score 5 56/100
Negative-Revenue Years (5) 3/5 40/100

5 of 5 gurus held; 2 added; 3 trimmed.

Holders: 5
Avg Δ position: +135.0%
New buys: 0
Full exits: 0

Cooperman increased +635%
Dalio increased +166%
Wood decreased -88%

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.