FERGUSON ENTERPRISES INC (FERG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:FERG - US31488V1070 - Common Stock
252.16 USD
+0.39 (+0.15%)
We assign a fundamental rating of 6 out of 10 to FERG. FERG was compared to 50 industry peers in the Trading Companies & Distributors industry. While FERG belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. FERG is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- FERG had positive earnings in the past year.
- FERG had a positive operating cash flow in the past year.
- In the past 5 years FERG has always been profitable.
- In the past 5 years FERG always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 11.05%, FERG belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
- FERG's Return On Equity of 32.30% is amongst the best of the industry. FERG outperforms 92.00% of its industry peers.
- The Return On Invested Capital of FERG (16.59%) is better than 94.00% of its industry peers.
- FERG had an Average Return On Invested Capital over the past 3 years of 18.09%. This is significantly above the industry average of 9.64%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.05% | ||
| ROE | 32.3% | ||
| ROIC | 16.59% |
ROA(3y)10.92%
ROA(5y)11.41%
ROE(3y)33.41%
ROE(5y)35.03%
ROIC(3y)18.09%
ROIC(5y)18.28%
1.3 Margins
- FERG's Profit Margin of 6.28% is fine compared to the rest of the industry. FERG outperforms 66.00% of its industry peers.
- FERG's Profit Margin has improved in the last couple of years.
- FERG's Operating Margin of 8.95% is fine compared to the rest of the industry. FERG outperforms 62.00% of its industry peers.
- In the last couple of years the Operating Margin of FERG has grown nicely.
- FERG's Gross Margin of 30.81% is in line compared to the rest of the industry. FERG outperforms 56.00% of its industry peers.
- In the last couple of years the Gross Margin of FERG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.95% | ||
| PM (TTM) | 6.28% | ||
| GM | 30.81% |
OM growth 3Y-4.18%
OM growth 5Y4.88%
PM growth 3Y-6.7%
PM growth 5Y4.6%
GM growth 3Y0.02%
GM growth 5Y0.44%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so FERG is creating value.
- The number of shares outstanding for FERG has been reduced compared to 1 year ago.
- The number of shares outstanding for FERG has been reduced compared to 5 years ago.
- The debt/assets ratio for FERG has been reduced compared to a year ago.
2.2 Solvency
- FERG has an Altman-Z score of 5.71. This indicates that FERG is financially healthy and has little risk of bankruptcy at the moment.
- FERG has a better Altman-Z score (5.71) than 82.00% of its industry peers.
- The Debt to FCF ratio of FERG is 2.50, which is a good value as it means it would take FERG, 2.50 years of fcf income to pay off all of its debts.
- FERG has a Debt to FCF ratio of 2.50. This is in the better half of the industry: FERG outperforms 76.00% of its industry peers.
- FERG has a Debt/Equity ratio of 0.68. This is a neutral value indicating FERG is somewhat dependend on debt financing.
- The Debt to Equity ratio of FERG (0.68) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 2.5 | ||
| Altman-Z | 5.71 |
ROIC/WACC1.72
WACC9.64%
2.3 Liquidity
- A Current Ratio of 1.88 indicates that FERG should not have too much problems paying its short term obligations.
- FERG has a Current ratio (1.88) which is comparable to the rest of the industry.
- FERG has a Quick Ratio of 1.01. This is a normal value and indicates that FERG is financially healthy and should not expect problems in meeting its short term obligations.
- FERG has a worse Quick ratio (1.01) than 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.88 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.96% over the past year.
- FERG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.44% yearly.
- FERG shows a small growth in Revenue. In the last year, the Revenue has grown by 4.92%.
- FERG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.06% yearly.
EPS 1Y (TTM)8.96%
EPS 3Y-1.3%
EPS 5Y14.44%
EPS Q2Q%15.92%
Revenue 1Y (TTM)4.92%
Revenue growth 3Y2.5%
Revenue growth 5Y9.06%
Sales Q2Q%5.11%
3.2 Future
- The Earnings Per Share is expected to grow by 11.31% on average over the next years. This is quite good.
- FERG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.51% yearly.
EPS Next Y12.11%
EPS Next 2Y11.72%
EPS Next 3Y10.31%
EPS Next 5Y11.31%
Revenue Next Year5.67%
Revenue Next 2Y5.52%
Revenue Next 3Y5.64%
Revenue Next 5Y8.51%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 24.39, FERG is valued on the expensive side.
- The rest of the industry has a similar Price/Earnings ratio as FERG.
- FERG's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.30.
- Based on the Price/Forward Earnings ratio of 20.31, the valuation of FERG can be described as rather expensive.
- FERG's Price/Forward Earnings ratio is in line with the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 24.32. FERG is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.39 | ||
| Fwd PE | 20.31 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as FERG.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of FERG indicates a somewhat cheap valuation: FERG is cheaper than 68.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.01 | ||
| EV/EBITDA | 16.72 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of FERG may justify a higher PE ratio.
PEG (NY)2.01
PEG (5Y)1.69
EPS Next 2Y11.72%
EPS Next 3Y10.31%
5. Dividend
5.1 Amount
- FERG has a Yearly Dividend Yield of 1.42%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.48, FERG pays a bit more dividend than its industry peers.
- FERG's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.42% |
5.2 History
- The dividend of FERG is nicely growing with an annual growth rate of 11.33%!
- FERG has paid a dividend for at least 10 years, which is a reliable track record.
- The dividend of FERG decreased recently.
Dividend Growth(5Y)11.33%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- 33.38% of the earnings are spent on dividend by FERG. This is a low number and sustainable payout ratio.
- FERG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP33.38%
EPS Next 2Y11.72%
EPS Next 3Y10.31%
FERGUSON ENTERPRISES INC / FERG FAQ
What is the ChartMill fundamental rating of FERGUSON ENTERPRISES INC (FERG) stock?
ChartMill assigns a fundamental rating of 6 / 10 to FERG.
Can you provide the valuation status for FERGUSON ENTERPRISES INC?
ChartMill assigns a valuation rating of 3 / 10 to FERGUSON ENTERPRISES INC (FERG). This can be considered as Overvalued.
Can you provide the profitability details for FERGUSON ENTERPRISES INC?
FERGUSON ENTERPRISES INC (FERG) has a profitability rating of 8 / 10.
What are the PE and PB ratios of FERGUSON ENTERPRISES INC (FERG) stock?
The Price/Earnings (PE) ratio for FERGUSON ENTERPRISES INC (FERG) is 24.39 and the Price/Book (PB) ratio is 8.16.
How financially healthy is FERGUSON ENTERPRISES INC?
The financial health rating of FERGUSON ENTERPRISES INC (FERG) is 6 / 10.