Is WAT a high-quality business?

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

What is Waters Corporation's AlphaQuality grade?

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

WAT - Waters Corporation

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $402.75 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

B 70.5 / 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%

B 71.4

5yr Avg ROIC 17.7% 87/100
Operating Margin Trend -0.40 pp/yr 36/100

Capital Efficiency

Weight: 15%

A 92.7

5yr Avg ROE 26.0% 100/100
5yr Share-Count CAGR -0.9% 79/100

Growth Quality

Weight: 15%

D+ 43.4

5yr Revenue CAGR 3.2% 47/100
5yr EPS CAGR -0.9% 18/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 15%

A- 82.7

5yr FCF Margin 17.6% 86/100
5yr FCF/NI Conversion 0.79x 79/100

Balance Sheet

Weight: 20%

A- 80.0

Net Debt / EBITDA 0.89x 86/100
Interest Coverage (EBIT/Int) 15.87x 94/100
Altman Z-Score 2.36 53/100

Stability

Weight: 15%

C- 49.3

EPS Volatility (σ/μ) 0.40 43/100
Piotroski F-Score 3 33/100
Negative-Revenue Years (5) 1/5 80/100

5 of 5 gurus held; 1 new buy; 2 added; 2 trimmed; 1 full exit.

Holders: 5 +1
Avg Δ position: +27.8%
New buys: 1
Full exits: 1

Halvorsen new
Dalio sold -100%
Cooperman increased +191%

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.