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HWM, Howmet Aerospace

Howmet Aerospace Inc. is a Delaware corporation with its principal office in Pittsburgh, Pennsylvania.

Following this separation, Howmet retained the Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels businesses; and its prior Rolled Products, Aluminum Extrusions, and Building and Construction Systems businesses were spun-off to Arconic Corporation.

Following this separation, the Company retained the Engineered Products and Solutions, Global Rolled Products, and Transportation and Construction Solutions businesses.

Latest annual: FY2025 10-K

HWM · Howmet Aerospace

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$8.3B

+11.1% YoY · 9% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $8.6B 5-yr avg $6.6B

Operating margin 26.7% 5-yr avg 19.2%

ROIC 25% 5-yr avg 16%

Owner-earnings margin 19% 5-yr avg 11%

Free cash flow margin 19% 5-yr avg 11%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is led by Engine Products (52%) and Fastening Systems (21%), with 2 more segments behind.
What moves the needle: Operating margin has run about 12% through the cycle, a solid margin the cost base and competition set as much as the price does. The operating margin has swung widely — from 3.7% to 25% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. Inventory runs near 25% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the commodity price and the cost position. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 9%). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 4 segments, the largest Engine Products at 52%.

Revenue by reportable segment, FY2025

Engine Products52%$4.3B
Fastening Systems21%$1.7B
Engineered Structures14%$1.1B
Forged Wheels13%$1.0B

By geographyUnited States53%Other12%France8%Japan6%Germany5%United Kingdom5%Other11%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$12.4B	$13.0B	$6.8B	$7.1B	$5.3B	$5.0B	$5.7B	$6.6B	$7.4B	$8.3B	$8.6B	RevenueRevenue
7%	6%	5%	6%	5%	5%	5%	5%	5%	4%	5%	SG&A / revenueSG&A/rev
1%	1%	1%	0%	0%	0%	1%	1%	0%	0%	0%	R&D / revenueR&D/rev
$954M	$480M	$775M	$579M	$626M	$748M	$919M	$1.2B	$1.6B	$2.0B	$2.3B	Operating incomeOp. inc.
7.7%	3.7%	11.4%	8.2%	11.9%	15.0%	16.2%	18.1%	22.0%	24.8%	26.7%	Operating marginOp. mgn
($941M)	($74M)	$642M	$470M	$261M	$258M	$469M	$765M	$1.2B	$1.5B	$1.7B	Net incomeNet inc.
—	—	16%	15%	—	20%	23%	22%	16%	18%	17%	Effective tax rateTax rate
											Cash flow & returns
$95M	($39M)	$217M	$461M	$9M	$449M	$733M	$901M	$1.3B	$1.9B	$2.1B	Operating cash flowOp. cash
$1.1B	$551M	$576M	$536M	$338M	$270M	$265M	$272M	$277M	$283M	$288M	DepreciationDeprec.
($172M)	($570M)	($1.0B)	($614M)	($636M)	($119M)	($55M)	($186M)	($197M)	$20M	($21M)	Working capital & otherWC & other
$1.1B	$596M	$768M	$641M	$267M	$199M	$193M	$219M	$321M	$453M	$428M	CapexCapex
9.1%	4.6%	11.3%	9.0%	5.1%	4.0%	3.4%	3.3%	4.3%	5.5%	5.0%	Capex / revenueCapex/rev
($1.0B)	($635M)	($551M)	($180M)	($258M)	$250M	$540M	$682M	$977M	$1.4B	$1.7B	Owner earningsOwner earn.
−8.3%	−4.9%	−8.1%	−2.5%	−4.9%	5.0%	9.5%	10.3%	13.1%	17.3%	19.2%	Owner earnings marginOE mgn
($1.0B)	($635M)	($551M)	($180M)	($258M)	$250M	$540M	$682M	$977M	$1.4B	$1.7B	Free cash flowFCF
−8.3%	−4.9%	−8.1%	−2.5%	−4.9%	5.0%	9.5%	10.3%	13.1%	17.3%	19.2%	Free cash flow marginFCF mgn
$0	$0	$0	—	—	—	$0	$0	$5M	$0	$118M	AcquisitionsAcquis.
—	$0	$0	$1.1B	$73M	$430M	$400M	$250M	$500M	$700M	—	BuybacksBuybacks
4%	3%	7%	5%	9%	—	10%	13%	19%	22%	25%	ROICROIC
-18%	-2%	12%	10%	7%	7%	13%	19%	25%	28%	32%	Return on equityROE
											Balance sheet
$1.9B	$2.1B	$2.3B	$1.6B	$1.6B	$720M	$791M	$610M	$564M	$742M	$2.4B	Cash & investmentsCash+inv
$974M	$1.0B	$1.0B	$583M	$328M	$367M	$506M	$675M	$689M	$779M	$940M	ReceivablesReceiv.
$2.3B	$2.5B	$2.5B	$1.6B	$1.5B	$1.4B	$1.6B	$1.8B	$1.8B	$1.8B	$2.0B	InventoryInvent.
$1.7B	$1.8B	$2.1B	$976M	$599M	$732M	$962M	$982M	$948M	$845M	$1.1B	Accounts payablePayables
$1.5B	$1.7B	$1.4B	$1.2B	$1.2B	$1.0B	$1.2B	$1.5B	$1.6B	$1.8B	$1.9B	Operating working capitalOper. WC
$5.9B	$6.4B	$6.6B	$5.8B	$3.7B	$2.7B	$3.1B	$3.3B	$3.4B	$3.8B	$5.7B	Current assetsCur. assets
$2.7B	$2.8B	$3.5B	$4.1B	$1.7B	$1.3B	$1.5B	$1.8B	$1.5B	$1.8B	$2.3B	Current liabilitiesCur. liab.
2.1×	2.3×	1.9×	1.4×	2.2×	2.2×	2.1×	1.9×	2.2×	2.1×	2.4×	Current ratioCurr. ratio
$5.1B	$4.5B	$4.2B	$4.1B	$4.1B	$4.1B	$4.0B	$4.0B	$4.0B	$4.0B	$4.1B	GoodwillGoodwill
$20.0B	$18.7B	$18.7B	$17.6B	$11.4B	$10.2B	$10.3B	$10.4B	$10.5B	$11.2B	$13.1B	Total assetsAssets
$8.0B	$6.8B	$6.3B	$5.9B	$5.1B	$4.2B	$4.2B	$3.7B	$3.3B	$3.0B	$4.7B	Total debtDebt
$6.2B	$4.7B	$4.0B	$4.4B	$3.5B	$3.5B	$3.4B	$3.1B	$2.8B	$2.3B	$2.3B	Net debt / (cash)Net debt
1.9×	1.0×	2.1×	1.7×	2.0×	2.9×	4.0×	5.5×	8.4×	11.6×	13.1×	Interest coverageInt. cov.
$5.1B	$4.9B	$5.6B	$4.6B	$3.6B	$3.5B	$3.6B	$4.0B	$4.6B	$5.4B	$5.5B	Shareholders’ equityEquity
0.6%	0.4%	0.6%	1.0%	0.9%	0.8%	1.0%	0.8%	0.8%	0.9%	0.8%	Stock comp / revenueSBC/rev
—	$719M	—	$2M	$2M	$4M	—	—	—	—	—	Goodwill written downGW imp.
											Per share
438M	451M	503M	463M	439M	435M	421M	416M	410M	406M	403M	Shares out (diluted)Shares
$28.30	$28.74	$13.48	$15.33	$11.98	$11.43	$13.45	$15.96	$18.12	$20.33	$21.40	Revenue / shareRev/sh
$-2.15	$-0.16	$1.28	$1.02	$0.59	$0.59	$1.11	$1.84	$2.82	$3.71	$4.33	EPS (diluted)EPS
$-2.35	$-1.41	$-1.10	$-0.39	$-0.59	$0.57	$1.28	$1.64	$2.38	$3.52	$4.11	Owner earnings / shareOE/sh
$-2.35	$-1.41	$-1.10	$-0.39	$-0.59	$0.57	$1.28	$1.64	$2.38	$3.52	$4.11	Free cash flow / shareFCF/sh
$2.57	$1.32	$1.53	$1.38	$0.61	$0.46	$0.46	$0.53	$0.78	$1.12	$1.06	Cap. spending / shareCapex/sh
$11.68	$10.89	$11.08	$9.92	$8.15	$8.06	$8.55	$9.70	$11.11	$13.18	$13.70	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	−3.6%/yr	+11.2%/yr
EPS	—	+44.3%/yr
Capital spending / share	−8.8%/yr	+12.9%/yr
Book value / share	+1.4%/yr	+10.1%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Revenue+11.1%
“In 2025, Sales increased 11% from 2024 primarily as a result of growth in the commercial aerospace, defense aerospace, and gas turbines markets, including engine spares, favorable product pricing, and cost pass through, partially offset by lower volumes in the commercial transportation market.”
✓ figure matches the filed record

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

406Mpeak FY2018

ROIC

22%low FY2017

Net debt ÷ owner earnings

1.6×peak FY2021

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$1.4Bowner earningsvs.$1.5Bnet incomelow FY2016

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $1.5B of profit but $1.4B of owner earnings: $77M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$1.5B

Owner earnings$1.4B · 17% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$1.5B	$1.2B	$765M	$469M	$258M
Depreciation & amortizationnon-cash charge added back	+$283M	+$277M	+$272M	+$265M	+$270M
Stock-based compensationreal costnon-cash, but a real cost	+$73M	+$63M	+$50M	+$54M	+$40M
Working capital & othertiming of cash in and out, other non-cash items	+$20M	−$197M	−$186M	−$55M	−$119M
Cash from operations	$1.9B	$1.3B	$901M	$733M	$449M
Capital expenditurecash put back in to keep running and to grow	−$453M	−$321M	−$219M	−$193M	−$199M
Owner earnings	$1.4B	$977M	$682M	$540M	$250M
Owner-earnings marginowner earnings ÷ revenue	17%	13%	10%	10%	5%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $73M), owner earnings is nearer $1.4B.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 11.6×

Comfortable

Operating income $2.0B ÷ interest expense $176M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $3.4B · 1.7× operating profit

Modest net debt

Cash $742M − debt $4.2B

What this means
Netting $742M of cash and short-term investments against $4.2B of debt leaves $3.4B owed, about 1.7× a year's operating profit (2.0× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 54d

Tight

DSO 34 + DIO 35 − DPO 16 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 9%

Solid through the cycle

9-yr median, range 3%–22%; 19% latest = NOPAT $1.7B ÷ invested capital $8.8B

Industry peers: median 8%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 19% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 17%

High, recently turned positive

latest $1.4B = operating cash $1.9B − maintenance capex $453M; positive each of the last 3 years, after an earlier loss stretch (10-yr median -3%)

Industry peers: median 5%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 17% of revenue this year, a -3% median across 10 years. Treating stock comp as the real expense it is (less $73M of SBC) leaves $1.4B.
Are earnings backed by cash? 1.25×

Cash-backed

Cash from ops $1.9B ÷ net income $1.5B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 65%

Returns about half

Dividends + buybacks $923M ÷ Owner Earnings $1.4B

What this means
Of $1.4B Owner Earnings, $923M (65%) went back to shareholders, $223M dividends, $700M buybacks. Net of $73M stock comp, the real buyback was about $627M. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 1.60×

Expanding

Capex $453M ÷ depreciation $283M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $8.3B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.13×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $4.2B vs $2.0B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 2 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $2.86/share (latest year $3.77), the averaged base the calculator's gate runs on, and book value is $13.38/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 8 of 10

What this means
Lost money in 2 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 2 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 8% → 22% (3-yr avg ends)

In the filing’s words The record and the words agree: the margin widened and the filing attributes the gain to its own pricing, not volume alone.

What this means
Through the cycle the operating margin widened — about 8% early to 22% lately, median 12% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Worst year 2017 · 3.7% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −0.8%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
How management talks about it Owner’s terms

What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“The Company's competitors may adopt new technological initiatives and implement technological advancements using AI to pursue new or improved products and services more quickly, profitably, successfully and effectively than the Company.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$5.7B

Cash & short-term investments$2.4B
Receivables$940M
Inventory$2.0B
Other current assets$307M

Current liabilities$2.3B

Debt due within a year$186M
Accounts payable$1.1B
Other current liabilities$1.1B

Current ratio2.44×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.59×stricter: inventory excluded

Cash ratio1.05×strictest: cash alone against what's due

Working capital$3.3Bthe cushion left after near-term bills

Debt due this year vs. cash$186M due · $2.4B cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+19.1%the freshest read on whether the business is still growing

Current ratio, recent quarters1.5× → 2.4×

Deeper floors

Tangible book value$993Mequity stripped of goodwill & intangibles

Net current asset value($1.9B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$4.4B$162M of it operating leases

Deferred revenue$235Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $6.0B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$4.8B · 80%
Buybacks$3.5B · 58%

Returned to owners$3.5B
286% of the owner earnings the business produced over the span, $0 as dividends and $3.5B as buybacks.
Source of funding−$2.3B
Reinvestment and shareholder returns ran $2.3B beyond the operating cash the business generated, so the gap was financed off the balance sheet.
Average price paid for buybacks$56.81
Across the years where the filing reports a share count, 40M shares were bought for $2.3B, about $56.81 each. Year to year the price paid ranged from $32.07 (2021) to $160.52 (2025), and 2025, near the top of that range, was also its heaviest buyback year ($700M).
Net change in share count−8.0%
The diluted count fell from 438M to 403M, so the buybacks outran the stock issued to staff.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Return on what it retained175%
Of the earnings it kept rather than paid out ($1.0B over the span), annual owner earnings (first three years vs last three) grew $1.8B, so each retained $1 added about 1.75 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$4.5B40% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity75%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$15Mover 10 years buying other businesses, against $4.8B of capital spent building

$727M written down across 4 years (2017, 2019, 2020, 2021): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	John C. Plant	$17.2M	$27.7M	$250M
2021	John C. Plant	$7.2M	−$8.4M	$250M
2022	John C. Plant	$1.7M	$28.8M	$540M
2023	John C. Plant	$7.3M	$25.7M	$682M
2024	John C. Plant	$22.4M	$46.5M	$977M
2025	John C. Plant	$70.5M	$134.8M	$1.4B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$73M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Howmet Aerospace is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

1 of the 6 tests turned up something to look into; the other 5 came back clean.

Look hereAre "one-time" charges a yearly habit?9 of 10 years
Management took an impairment or write-down in 9 of the last 10 years, $1.4B in all. A charge taken almost every year is not one-time; it is the business — past deals coming due, and an admission the assets were worth less than what was paid. Munger's rule: when the "one-time" keeps happening, it is the business. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did debt outgrow the business?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Pension & retirement, Income taxes as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Aerospace & Defense

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
GLWCorning Incorporated	$15.6B	36%	12.7%	6%	7%
AAAlcoa	$12.8B	—	4.6%	5%	2%
CSTMConstellium SE Ordinary Shares (France)	$8.4B	—	3.8%	9%	1%
HWMHowmet Aerospace	$8.3B	—	13.5%	9%	1%
CMCCommercial Metals	$7.8B	16%	5.7%	9%	6%
MLIMueller Industries	$4.2B	16%	13.8%	25%	8%
KALUKaiser Aluminum Corporation	$3.4B	16%	6.3%	8%	5%
NXQuanex Building Products Corporation	$1.8B	23%	4.2%	6%	5%
Group median	—	—	6.0%	8%	5%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Howmet Aerospace has delivered.

Howmet Aerospace’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Howmet Aerospace earns about $103M on its 1.2% median owner-earnings margin. This year’s 17.3% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($103M) Net of stock comp (−$73M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+32%/yr

Owner-earnings growth · since FY2021+55%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $1.7B on 400M shares outstanding, per the 10-Q cover, as of 2026-05-04; net debt $2.3B. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh HWM against another business →

The owners of HWM: the meeting and the votes →

Cite: Owner Scorecard, "Howmet Aerospace (HWM), the owner's record," https://ownerscorecard.com/c/HWM, data as of 2026-07-09.

Manual order: ← HWKN its page in the Manual HXL →

Industry order: ← HON the Aerospace & Defense chapter JOBY →