About Buffett Score
A data-driven scoring system that evaluates public companies against the investment principles outlined in Buffettology by Mary Buffett and David Clark.
What Is the Buffett Score?
The Buffett Score is a 9-point system inspired by the book Buffettology by Mary Buffett and David Clark. Each criterion maps to a core tenet of Warren Buffett's investing philosophy — profitability, valuation, competitive moats, balance-sheet strength, and consistent growth. A stock that passes all nine checks scores 100%, meaning it aligns closely with the kind of business Buffett has historically favored.
The 9 Criteria
1. High ROE (>12%)
Return on equity measures how efficiently a company generates profit from shareholders' equity. Buffett looks for businesses that consistently earn high returns without excessive leverage.
2. High ROIC (>9%)
Return on invested capital reveals how well a company allocates all its capital — both debt and equity. A high ROIC signals a durable competitive advantage.
3. Cash Machine (FCF/Assets >5%)
Free cash flow relative to total assets shows whether a business generates real cash, not just accounting profits. Cash-rich companies can reinvest, pay dividends, and weather downturns.
4. Fair Valuation (Earnings Yield >3.5%)
Earnings yield (inverse of P/E) helps avoid overpaying for a stock. Even a great business is a bad investment at the wrong price.
5. Share Buybacks
A declining share count signals management is returning value to shareholders by repurchasing stock — a hallmark of Buffett-style capital allocation.
6. Defensible Moat (Gross Margin >40%)
High gross margins indicate pricing power and a competitive moat. Companies that can charge a premium tend to sustain profitability over time.
7. Simple Business
Buffett favors businesses he can understand — companies in non-speculative sectors with straightforward models. If you can't explain how it makes money, it's too complex.
8. Conservative Debt (D/E <1.5)
A low debt-to-equity ratio means the company isn't relying on borrowed money to grow. Conservative balance sheets reduce risk in recessions and rising-rate environments.
9. Consistent Growth (5yr growth positive)
Sustained revenue or earnings growth over five years shows a proven track record. Buffett wants compounders, not turnarounds.
Go Deeper with Vetted
Buffett Score covers one legendary investor's framework — but there are more ways to evaluate a stock. The Vetted iOS app includes scores inspired by Peter Lynch, Benjamin Graham, and other investing greats, plus broader stock coverage and screening tools.
Download Vetted on the App Store