Is SM a high-quality business?

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

What is SM Energy Company's AlphaQuality grade?

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

SM - SM Energy Company

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $33.25 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Oil & Gas E&P

AlphaQuality — archetype-weighted quantitative grade

B- 62.1 / 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 74.2

5yr Avg ROIC 10.6% 63/100
Operating Margin Trend +2.91 pp/yr 100/100

Capital Efficiency

Weight: 10%

A- 80.1

5yr Avg ROE 14.1% 77/100
5yr Share-Count CAGR -1.8% 86/100

Growth Quality

Weight: 5%

B+ 77.9

5yr Revenue CAGR 5.0% 60/100
5yr EPS CAGR 110.0% 100/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 25%

C 56.1

5yr FCF Margin 4.0% 45/100
5yr FCF/NI Conversion 2.67x 70/100

Balance Sheet

Weight: 25%

C+ 61.4

Net Debt / EBITDA 0.87x 86/100
Interest Coverage (EBIT/Int) 5.80x 68/100
Altman Z-Score 0.56 8/100

Stability

Weight: 20%

C- 48.8

EPS Volatility (σ/μ) 0.54 27/100
Piotroski F-Score 5 56/100
Negative-Revenue Years (5) 1/5 80/100

4 of 5 gurus held; 3 added; 1 trimmed; 1 full exit.

Holders: 4 -1
Avg Δ position: +2797.4%
New buys: 0
Full exits: 1

Dalio sold -100%
Greenblatt increased +11232%
Cooperman 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.