GRACO INC (GGG) Stock Fundamental Analysis
NYSE:GGG - New York Stock Exchange, Inc. - US3841091040 - Common Stock - Currency: USD
Overall GGG gets a fundamental rating of 7 out of 10. We evaluated GGG against 128 industry peers in the Machinery industry. Both the health and profitability get an excellent rating, making GGG a very profitable company, without any liquidiy or solvency issues. While showing a medium growth rate, GGG is valued expensive at the moment. With these ratings, GGG could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
GGG had positive earnings in the past year.
In the past year GGG had a positive cash flow from operations.
GGG had positive earnings in each of the past 5 years.
GGG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 15.48%, GGG belongs to the top of the industry, outperforming 94.53% of the companies in the same industry.
GGG has a Return On Equity of 18.81%. This is amongst the best in the industry. GGG outperforms 81.25% of its industry peers.
GGG has a better Return On Invested Capital (17.10%) than 90.63% of its industry peers.
GGG had an Average Return On Invested Capital over the past 3 years of 21.05%. This is significantly above the industry average of 10.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.48% | ||
| ROE | 18.81% | ||
| ROIC | 17.1% |
ROA(3y)17.66%
ROA(5y)17.52%
ROE(3y)22.12%
ROE(5y)23.57%
ROIC(3y)21.05%
ROIC(5y)21.26%
1.3 Margins
With an excellent Profit Margin value of 23.00%, GGG belongs to the best of the industry, outperforming 98.44% of the companies in the same industry.
In the last couple of years the Profit Margin of GGG has grown nicely.
GGG's Operating Margin of 26.98% is amongst the best of the industry. GGG outperforms 99.22% of its industry peers.
GGG's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 53.11%, GGG belongs to the best of the industry, outperforming 94.53% of the companies in the same industry.
In the last couple of years the Gross Margin of GGG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.98% | ||
| PM (TTM) | 23% | ||
| GM | 53.11% |
OM growth 3Y0.31%
OM growth 5Y0.9%
PM growth 3Y1.29%
PM growth 5Y1.94%
GM growth 3Y0.7%
GM growth 5Y0.33%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so GGG is creating value.
Compared to 1 year ago, GGG has more shares outstanding
Compared to 5 years ago, GGG has more shares outstanding
The debt/assets ratio for GGG has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 16.64 indicates that GGG is not in any danger for bankruptcy at the moment.
GGG has a Altman-Z score of 16.64. This is amongst the best in the industry. GGG outperforms 96.88% of its industry peers.
The Debt to FCF ratio of GGG is 0.06, which is an excellent value as it means it would take GGG, only 0.06 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of GGG (0.06) is better than 90.63% of its industry peers.
GGG has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
With an excellent Debt to Equity ratio value of 0.01, GGG belongs to the best of the industry, outperforming 82.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 16.64 |
ROIC/WACC1.68
WACC10.2%
2.3 Liquidity
GGG has a Current Ratio of 3.69. This indicates that GGG is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 3.69, GGG belongs to the best of the industry, outperforming 85.16% of the companies in the same industry.
A Quick Ratio of 2.69 indicates that GGG has no problem at all paying its short term obligations.
GGG has a Quick ratio of 2.69. This is amongst the best in the industry. GGG outperforms 85.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.69 | ||
| Quick Ratio | 2.69 |
3. Growth
3.1 Past
The earnings per share for GGG have decreased by -9.51% in the last year.
The Earnings Per Share has been growing slightly by 7.75% on average over the past years.
Looking at the last year, GGG shows a decrease in Revenue. The Revenue has decreased by -3.75% in the last year.
The Revenue has been growing slightly by 5.13% on average over the past years.
EPS 1Y (TTM)-9.51%
EPS 3Y4.34%
EPS 5Y7.75%
EPS Q2Q%-20%
Revenue 1Y (TTM)-3.75%
Revenue growth 3Y2.07%
Revenue growth 5Y5.13%
Sales Q2Q%-3.17%
3.2 Future
The Earnings Per Share is expected to grow by 11.60% on average over the next years. This is quite good.
GGG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.10% yearly.
EPS Next Y10.26%
EPS Next 2Y9.09%
EPS Next 3Y9.75%
EPS Next 5Y11.6%
Revenue Next Year5.6%
Revenue Next 2Y5.34%
Revenue Next 3Y6.17%
Revenue Next 5Y10.1%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 28.47, which means the current valuation is very expensive for GGG.
Based on the Price/Earnings ratio, GGG is valued a bit more expensive than the industry average as 67.19% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 28.29, GGG is valued at the same level.
With a Price/Forward Earnings ratio of 25.82, GGG can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, GGG is valued a bit more expensive than 60.94% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.08. GGG is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.47 | ||
| Fwd PE | 25.82 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GGG is valued a bit more expensive than the industry average as 65.63% of the companies are valued more cheaply.
The rest of the industry has a similar Price/Free Cash Flow ratio as GGG.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.66 | ||
| EV/EBITDA | 19.09 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
GGG has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.77
PEG (5Y)3.67
EPS Next 2Y9.09%
EPS Next 3Y9.75%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.40%, GGG has a reasonable but not impressive dividend return.
GGG's Dividend Yield is a higher than the industry average which is at 2.12.
With a Dividend Yield of 1.40, GGG pays less dividend than the S&P500 average, which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
5.2 History
On average, the dividend of GGG grows each year by 9.78%, which is quite nice.
GGG has paid a dividend for at least 10 years, which is a reliable track record.
GGG has decreased its dividend recently.
Dividend Growth(5Y)9.78%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
GGG pays out 35.40% of its income as dividend. This is a sustainable payout ratio.
GGG's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP35.4%
EPS Next 2Y9.09%
EPS Next 3Y9.75%
78.58
+0.16 (+0.2%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners90.65%
Inst Owner Change0.23%
Ins Owners0.85%
Ins Owner Change3.26%
Market Cap13.21B
Analysts70
Price Target93.5 (18.99%)
Short Float %1.3%
Short Ratio2.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
Yearly Dividend1.02
Dividend Growth(5Y)9.78%
DP35.4%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-12.31%
Min EPS beat(2)-17.34%
Max EPS beat(2)-7.29%
EPS beat(4)0
Avg EPS beat(4)-9.87%
Min EPS beat(4)-17.34%
Max EPS beat(4)-1.34%
EPS beat(8)3
Avg EPS beat(8)-3.25%
EPS beat(12)6
Avg EPS beat(12)-2.27%
EPS beat(16)9
Avg EPS beat(16)-1.25%
Revenue beat(2)0
Avg Revenue beat(2)-3.47%
Min Revenue beat(2)-4.57%
Max Revenue beat(2)-2.37%
Revenue beat(4)0
Avg Revenue beat(4)-4.7%
Min Revenue beat(4)-9.13%
Max Revenue beat(4)-2.37%
Revenue beat(8)1
Avg Revenue beat(8)-2.83%
Revenue beat(12)3
Avg Revenue beat(12)-1.85%
Revenue beat(16)6
Avg Revenue beat(16)-0.7%
PT rev (1m)-1.74%
PT rev (3m)3.69%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.79%
EPS NY rev (1m)-0.33%
EPS NY rev (3m)-1.98%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.23%
Revenue NY rev (1m)-0.31%
Revenue NY rev (3m)0.94%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.47 | ||
| Fwd PE | 25.82 | ||
| P/S | 6.25 | ||
| P/FCF | 25.66 | ||
| P/OCF | 21.25 | ||
| P/B | 5.11 | ||
| P/tB | 7.09 | ||
| EV/EBITDA | 19.09 |
EPS(TTM)2.76
EY3.51%
EPS(NY)3.04
Fwd EY3.87%
FCF(TTM)3.06
FCFY3.9%
OCF(TTM)3.7
OCFY4.71%
SpS12.57
BVpS15.37
TBVpS11.08
PEG (NY)2.77
PEG (5Y)3.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.48% | ||
| ROE | 18.81% | ||
| ROCE | 20.86% | ||
| ROIC | 17.1% | ||
| ROICexc | 22.63% | ||
| ROICexgc | 34.58% | ||
| OM | 26.98% | ||
| PM (TTM) | 23% | ||
| GM | 53.11% | ||
| FCFM | 24.37% |
ROA(3y)17.66%
ROA(5y)17.52%
ROE(3y)22.12%
ROE(5y)23.57%
ROIC(3y)21.05%
ROIC(5y)21.26%
ROICexc(3y)26.67%
ROICexc(5y)27.9%
ROICexgc(3y)38.29%
ROICexgc(5y)42.21%
ROCE(3y)25.69%
ROCE(5y)26.03%
ROICexcg growth 3Y-12.63%
ROICexcg growth 5Y-6.63%
ROICexc growth 3Y-11.33%
ROICexc growth 5Y-5.14%
OM growth 3Y0.31%
OM growth 5Y0.9%
PM growth 3Y1.29%
PM growth 5Y1.94%
GM growth 3Y0.7%
GM growth 5Y0.33%
F-Score6
Asset Turnover0.67
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Debt/EBITDA | 0.04 | ||
| Cap/Depr | 123.04% | ||
| Cap/Sales | 5.05% | ||
| Interest Coverage | 190.03 | ||
| Cash Conversion | 94.65% | ||
| Profit Quality | 105.94% | ||
| Current Ratio | 3.69 | ||
| Quick Ratio | 2.69 | ||
| Altman-Z | 16.64 |
F-Score6
WACC10.2%
ROIC/WACC1.68
Cap/Depr(3y)225.5%
Cap/Depr(5y)206.15%
Cap/Sales(3y)7.62%
Cap/Sales(5y)6.78%
Profit Quality(3y)78.75%
Profit Quality(5y)81.48%
High Growth Momentum
Growth
EPS 1Y (TTM)-9.51%
EPS 3Y4.34%
EPS 5Y7.75%
EPS Q2Q%-20%
EPS Next Y10.26%
EPS Next 2Y9.09%
EPS Next 3Y9.75%
EPS Next 5Y11.6%
Revenue 1Y (TTM)-3.75%
Revenue growth 3Y2.07%
Revenue growth 5Y5.13%
Sales Q2Q%-3.17%
Revenue Next Year5.6%
Revenue Next 2Y5.34%
Revenue Next 3Y6.17%
Revenue Next 5Y10.1%
EBIT growth 1Y-12.93%
EBIT growth 3Y2.38%
EBIT growth 5Y6.08%
EBIT Next Year20.82%
EBIT Next 3Y12.54%
EBIT Next 5Y13.65%
FCF growth 1Y10.45%
FCF growth 3Y16.79%
FCF growth 5Y12.12%
OCF growth 1Y-4.5%
OCF growth 3Y10.81%
OCF growth 5Y8.23%