FERGUSON ENTERPRISES INC (FERG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:FERG - US31488V1070 - Common Stock
254.02 USD
+2.25 (+0.89%)
254.02 USD
0 (0%)
Overall FERG gets a fundamental rating of 6 out of 10. We evaluated FERG against 50 industry peers in the Trading Companies & Distributors industry. FERG scores excellent on profitability, but there are some minor concerns on its financial health. FERG has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- FERG had positive earnings in the past year.
- In the past year FERG had a positive cash flow from operations.
- FERG had positive earnings in each of the past 5 years.
- 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 has a Return On Equity of 32.30%. This is amongst the best in the industry. FERG outperforms 92.00% of its industry peers.
- FERG's Return On Invested Capital of 16.59% is amongst the best of the industry. FERG outperforms 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 has a Profit Margin of 6.28%. This is in the better half of the industry: FERG outperforms 66.00% of its industry peers.
- FERG's Profit Margin has improved in the last couple of years.
- FERG has a better Operating Margin (8.95%) than 62.00% of its industry peers.
- FERG's Operating Margin has improved in the last couple of years.
- FERG has a Gross Margin (30.81%) which is comparable to the rest of the industry.
- FERG's Gross Margin has been stable in the last couple of years.
| 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.
- Compared to 1 year ago, FERG has less shares outstanding
- Compared to 5 years ago, FERG has less shares outstanding
- FERG has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 5.73 indicates that FERG is not in any danger for bankruptcy at the moment.
- FERG has a Altman-Z score of 5.73. This is amongst the best in the industry. FERG outperforms 82.00% of its industry peers.
- FERG has a debt to FCF ratio of 2.50. This is a good value and a sign of high solvency as FERG would need 2.50 years to pay back of all of its debts.
- FERG has a better Debt to FCF ratio (2.50) than 76.00% of its industry peers.
- A Debt/Equity ratio of 0.68 indicates that FERG is somewhat dependend on debt financing.
- FERG has a Debt to Equity ratio (0.68) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 2.5 | ||
| Altman-Z | 5.73 |
ROIC/WACC1.72
WACC9.63%
2.3 Liquidity
- A Current Ratio of 1.88 indicates that FERG should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.88, FERG is in line with its industry, outperforming 50.00% of the companies in the same 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.
- The Quick ratio of FERG (1.01) is worse 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.
- Measured over the past years, FERG shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.44% on average per year.
- FERG shows a small growth in Revenue. In the last year, the Revenue has grown by 4.92%.
- The Revenue has been growing by 9.06% on average over the past years. This is quite good.
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
- FERG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.31% yearly.
- Based on estimates for the next years, FERG will show a quite strong growth in Revenue. The Revenue will grow by 8.51% on average per year.
EPS Next Y11.07%
EPS Next 2Y11.56%
EPS Next 3Y10.1%
EPS Next 5Y11.31%
Revenue Next Year5.66%
Revenue Next 2Y5.52%
Revenue Next 3Y5.62%
Revenue Next 5Y8.51%
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 24.57, the valuation of FERG can be described as rather expensive.
- FERG's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.21. FERG is around the same levels.
- Based on the Price/Forward Earnings ratio of 20.51, the valuation of FERG can be described as rather expensive.
- The rest of the industry has a similar Price/Forward Earnings ratio as FERG.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. FERG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.57 | ||
| Fwd PE | 20.51 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of FERG is on the same level as its industry peers.
- Based on the Price/Free Cash Flow ratio, FERG is valued a bit cheaper than the industry average as 66.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.23 | ||
| EV/EBITDA | 16.86 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- FERG has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.22
PEG (5Y)1.7
EPS Next 2Y11.56%
EPS Next 3Y10.1%
5. Dividend
5.1 Amount
- FERG has a Yearly Dividend Yield of 1.41%.
- FERG's Dividend Yield is a higher than the industry average which is at 1.31.
- FERG's Dividend Yield is slightly below the S&P500 average, which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
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.
- The dividend of FERG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP33.38%
EPS Next 2Y11.56%
EPS Next 3Y10.1%
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 4 / 10 to FERGUSON ENTERPRISES INC (FERG). This can be considered as Fairly Valued.
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 24.57 and the Price/Book (PB) ratio is 8.22.
How financially healthy is FERGUSON ENTERPRISES INC?
The financial health rating of FERGUSON ENTERPRISES INC (FERG) is 6 / 10.