GRACO INC (GGG) Stock Fundamental Analysis
NYSE:GGG - New York Stock Exchange, Inc. - US3841091040 - Common Stock - Currency: USD
Taking everything into account, GGG scores 7 out of 10 in our fundamental rating. GGG was compared to 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. GGG is quite expensive at the moment. It does show a decent growth rate. This makes GGG very considerable for quality investing!
1. Profitability
1.1 Basic Checks
GGG had positive earnings in the past year.
GGG had a positive operating cash flow in the past year.
Each year in the past 5 years GGG has been profitable.
In the past 5 years GGG always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of GGG (16.22%) is better than 94.53% of its industry peers.
The Return On Equity of GGG (19.69%) is better than 82.81% of its industry peers.
GGG has a Return On Invested Capital of 18.12%. This is amongst the best in the industry. GGG outperforms 92.19% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GGG is significantly above the industry average of 10.71%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.22% | ||
| ROE | 19.69% | ||
| ROIC | 18.12% |
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
The Profit Margin of GGG (22.70%) is better than 97.66% of its industry peers.
In the last couple of years the Profit Margin of GGG has grown nicely.
GGG's Operating Margin of 27.04% is amongst the best of the industry. GGG outperforms 98.44% of its industry peers.
In the last couple of years the Operating Margin of GGG has remained more or less at the same level.
Looking at the Gross Margin, with a value of 52.76%, GGG belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
GGG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.04% | ||
| PM (TTM) | 22.7% | ||
| GM | 52.76% |
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
GGG has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for GGG has been increased compared to 1 year ago.
Compared to 5 years ago, GGG has more shares outstanding
GGG has a better debt/assets ratio than last year.
2.2 Solvency
GGG has an Altman-Z score of 18.66. This indicates that GGG is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 18.66, GGG belongs to the best of the industry, outperforming 97.66% of the companies in the same industry.
The Debt to FCF ratio of GGG is 0.05, which is an excellent value as it means it would take GGG, only 0.05 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of GGG (0.05) is better than 91.41% 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.
The Debt to Equity ratio of GGG (0.01) is better than 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Altman-Z | 18.66 |
ROIC/WACC1.79
WACC10.12%
2.3 Liquidity
GGG has a Current Ratio of 3.61. This indicates that GGG is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 3.61, GGG belongs to the best of the industry, outperforming 83.59% of the companies in the same industry.
A Quick Ratio of 2.53 indicates that GGG has no problem at all paying its short term obligations.
GGG has a better Quick ratio (2.53) than 82.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.61 | ||
| Quick Ratio | 2.53 |
3. Growth
3.1 Past
The earnings per share for GGG have decreased by -5.07% in the last year.
Measured over the past 5 years, GGG shows a small growth in Earnings Per Share. The EPS has been growing by 7.75% on average per year.
The Revenue has decreased by -0.40% in the past year.
The Revenue has been growing slightly by 5.13% on average over the past years.
EPS 1Y (TTM)-5.07%
EPS 3Y4.34%
EPS 5Y7.75%
EPS Q2Q%7.69%
Revenue 1Y (TTM)-0.4%
Revenue growth 3Y2.07%
Revenue growth 5Y5.13%
Sales Q2Q%7.33%
3.2 Future
The Earnings Per Share is expected to grow by 11.74% on average over the next years. This is quite good.
Based on estimates for the next years, GGG will show a quite strong growth in Revenue. The Revenue will grow by 9.48% on average per year.
EPS Next Y8.57%
EPS Next 2Y8.18%
EPS Next 3Y9.26%
EPS Next 5Y11.74%
Revenue Next Year6.02%
Revenue Next 2Y5.03%
Revenue Next 3Y5.67%
Revenue Next 5Y9.48%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 30.59, the valuation of GGG can be described as expensive.
GGG's Price/Earnings ratio is a bit more expensive when compared to the industry. GGG is more expensive than 62.50% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.15, GGG is valued at the same level.
The Price/Forward Earnings ratio is 26.62, which means the current valuation is very expensive for GGG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GGG indicates a slightly more expensive valuation: GGG is more expensive than 63.28% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of GGG to the average of the S&P500 Index (21.60), we can say GGG is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.59 | ||
| Fwd PE | 26.62 |
4.2 Price Multiples
64.84% of the companies in the same industry are cheaper than GGG, based on the Enterprise Value to EBITDA ratio.
GGG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.22 | ||
| EV/EBITDA | 20.6 |
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)3.57
PEG (5Y)3.95
EPS Next 2Y8.18%
EPS Next 3Y9.26%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.28%, GGG has a reasonable but not impressive dividend return.
GGG's Dividend Yield is a higher than the industry average which is at 1.88.
Compared to an average S&P500 Dividend Yield of 2.42, GGG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
5.2 History
On average, the dividend of GGG grows each year by 9.78%, which is quite nice.
GGG has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of GGG decreased recently.
Dividend Growth(5Y)9.78%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
GGG pays out 36.03% of its income as dividend. This is a sustainable payout ratio.
GGG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.03%
EPS Next 2Y8.18%
EPS Next 3Y9.26%
85.97
-0.18 (-0.21%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners90.66%
Inst Owner Change-0.79%
Ins Owners0.84%
Ins Owner Change3.02%
Market Cap14.37B
Analysts70
Price Target90.95 (5.79%)
Short Float %1.85%
Short Ratio3.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
Yearly Dividend1.02
Dividend Growth(5Y)9.78%
DP36.03%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.66%
Min EPS beat(2)-17.34%
Max EPS beat(2)2.02%
EPS beat(4)1
Avg EPS beat(4)-5.98%
Min EPS beat(4)-17.34%
Max EPS beat(4)2.02%
EPS beat(8)3
Avg EPS beat(8)-5.21%
EPS beat(12)7
Avg EPS beat(12)-1.35%
EPS beat(16)9
Avg EPS beat(16)-1.98%
Revenue beat(2)0
Avg Revenue beat(2)-1.63%
Min Revenue beat(2)-2.37%
Max Revenue beat(2)-0.89%
Revenue beat(4)0
Avg Revenue beat(4)-2.64%
Min Revenue beat(4)-4.57%
Max Revenue beat(4)-0.89%
Revenue beat(8)0
Avg Revenue beat(8)-3.5%
Revenue beat(12)3
Avg Revenue beat(12)-1.54%
Revenue beat(16)5
Avg Revenue beat(16)-1.06%
PT rev (1m)0%
PT rev (3m)-2.73%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.25%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.46%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.59 | ||
| Fwd PE | 26.62 | ||
| P/S | 6.68 | ||
| P/FCF | 26.22 | ||
| P/OCF | 22.87 | ||
| P/B | 5.8 | ||
| P/tB | 8.21 | ||
| EV/EBITDA | 20.6 |
EPS(TTM)2.81
EY3.27%
EPS(NY)3.23
Fwd EY3.76%
FCF(TTM)3.28
FCFY3.81%
OCF(TTM)3.76
OCFY4.37%
SpS12.86
BVpS14.83
TBVpS10.47
PEG (NY)3.57
PEG (5Y)3.95
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.22% | ||
| ROE | 19.69% | ||
| ROCE | 22.11% | ||
| ROIC | 18.12% | ||
| ROICexc | 22.71% | ||
| ROICexgc | 34.57% | ||
| OM | 27.04% | ||
| PM (TTM) | 22.7% | ||
| GM | 52.76% | ||
| FCFM | 25.5% |
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-Score5
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Debt/EBITDA | 0.04 | ||
| Cap/Depr | 87.17% | ||
| Cap/Sales | 3.73% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 93.33% | ||
| Profit Quality | 112.31% | ||
| Current Ratio | 3.61 | ||
| Quick Ratio | 2.53 | ||
| Altman-Z | 18.66 |
F-Score5
WACC10.12%
ROIC/WACC1.79
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)-5.07%
EPS 3Y4.34%
EPS 5Y7.75%
EPS Q2Q%7.69%
EPS Next Y8.57%
EPS Next 2Y8.18%
EPS Next 3Y9.26%
EPS Next 5Y11.74%
Revenue 1Y (TTM)-0.4%
Revenue growth 3Y2.07%
Revenue growth 5Y5.13%
Sales Q2Q%7.33%
Revenue Next Year6.02%
Revenue Next 2Y5.03%
Revenue Next 3Y5.67%
Revenue Next 5Y9.48%
EBIT growth 1Y-7.91%
EBIT growth 3Y2.38%
EBIT growth 5Y6.08%
EBIT Next Year17.03%
EBIT Next 3Y10.94%
EBIT Next 5Y13.22%
FCF growth 1Y124.15%
FCF growth 3Y16.79%
FCF growth 5Y12.12%
OCF growth 1Y43.78%
OCF growth 3Y10.81%
OCF growth 5Y8.23%