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 129 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 valied quite expensively at the moment, while it does show a decent growth rate. 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.
GGG had a positive operating cash flow in the past year.
In the past 5 years GGG has always been profitable.
Each year in the past 5 years GGG had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 15.48%, GGG belongs to the best of the industry, outperforming 93.60% of the companies in the same industry.
Looking at the Return On Equity, with a value of 18.81%, GGG belongs to the top of the industry, outperforming 81.60% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 17.10%, GGG belongs to the top of the industry, outperforming 91.20% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GGG is significantly above the industry average of 10.79%.
| 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
Looking at the Profit Margin, with a value of 23.00%, GGG belongs to the top of the industry, outperforming 98.40% of the companies in the same industry.
GGG's Profit Margin has improved in the last couple of years.
GGG has a better Operating Margin (26.98%) than 99.20% of its industry peers.
GGG's Operating Margin has been stable in the last couple of years.
GGG has a Gross Margin of 53.11%. This is amongst the best in the industry. GGG outperforms 94.40% of its industry peers.
GGG's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), GGG is creating value.
Compared to 1 year ago, GGG has more shares outstanding
GGG has more shares outstanding than it did 5 years ago.
The debt/assets ratio for GGG has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 18.25 indicates that GGG is not in any danger for bankruptcy at the moment.
GGG has a Altman-Z score of 18.25. This is amongst the best in the industry. GGG outperforms 96.80% of its industry peers.
GGG has a debt to FCF ratio of 0.06. This is a very positive value and a sign of high solvency as it would only need 0.06 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.06, GGG belongs to the best of the industry, outperforming 91.20% of the companies in the same industry.
GGG has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
GGG's Debt to Equity ratio of 0.01 is amongst the best of the industry. GGG outperforms 80.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 18.25 |
ROIC/WACC1.52
WACC11.22%
2.3 Liquidity
A Current Ratio of 3.69 indicates that GGG has no problem at all paying its short term obligations.
The Current ratio of GGG (3.69) is better than 84.80% of its industry peers.
A Quick Ratio of 2.69 indicates that GGG has no problem at all paying its short term obligations.
GGG has a better Quick ratio (2.69) than 84.80% 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.
GGG shows a decrease in Revenue. In the last year, the revenue decreased by -3.75%.
GGG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.13% yearly.
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
Based on estimates for the next years, GGG will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.59% on average per year.
Based on estimates for the next years, GGG will show a quite strong growth in Revenue. The Revenue will grow by 11.60% on average per year.
EPS Next Y10.63%
EPS Next 2Y9.26%
EPS Next 3Y9.88%
EPS Next 5Y13.59%
Revenue Next Year5.92%
Revenue Next 2Y5.36%
Revenue Next 3Y5.98%
Revenue Next 5Y11.6%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 30.89, the valuation of GGG can be described as expensive.
67.20% of the companies in the same industry are cheaper than GGG, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 29.98, GGG is valued at the same level.
GGG is valuated quite expensively with a Price/Forward Earnings ratio of 27.92.
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 61.60% of the companies listed in the same industry.
GGG is valuated rather expensively when we compare the Price/Forward Earnings ratio to 22.66, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.89 | ||
| Fwd PE | 27.92 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GGG is valued a bit more expensive than 67.20% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GGG is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.96 | ||
| EV/EBITDA | 21.35 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates GGG does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of GGG may justify a higher PE ratio.
PEG (NY)2.91
PEG (5Y)3.98
EPS Next 2Y9.26%
EPS Next 3Y9.88%
5. Dividend
5.1 Amount
GGG has a Yearly Dividend Yield of 1.28%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.74, GGG pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.28, GGG pays less dividend than the S&P500 average, which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
5.2 History
On average, the dividend of GGG grows each year by 9.81%, 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)9.81%
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.
The dividend of GGG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP35.4%
EPS Next 2Y9.26%
EPS Next 3Y9.88%
85.26
-1.81 (-2.08%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners90.65%
Inst Owner Change2.07%
Ins Owners0.85%
Ins Owner Change2.53%
Market Cap14.40B
Analysts70.67
Price Target95.15 (11.6%)
Short Float %1.19%
Short Ratio2.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
Yearly Dividend1.02
Dividend Growth(5Y)9.81%
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)0.41%
PT rev (3m)7.04%
EPS NQ rev (1m)0.32%
EPS NQ rev (3m)0.79%
EPS NY rev (1m)-2.14%
EPS NY rev (3m)-1.74%
Revenue NQ rev (1m)2%
Revenue NQ rev (3m)3.23%
Revenue NY rev (1m)0.49%
Revenue NY rev (3m)1.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.89 | ||
| Fwd PE | 27.92 | ||
| P/S | 6.81 | ||
| P/FCF | 27.96 | ||
| P/OCF | 23.16 | ||
| P/B | 5.57 | ||
| P/tB | 7.73 | ||
| EV/EBITDA | 21.35 |
EPS(TTM)2.76
EY3.24%
EPS(NY)3.05
Fwd EY3.58%
FCF(TTM)3.05
FCFY3.58%
OCF(TTM)3.68
OCFY4.32%
SpS12.52
BVpS15.3
TBVpS11.04
PEG (NY)2.91
PEG (5Y)3.98
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)38.26%
ROICexgc(5y)42.2%
ROCE(3y)25.69%
ROCE(5y)26.03%
ROICexcg growth 3Y-12.69%
ROICexcg growth 5Y-6.67%
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 | 250 | ||
| Cash Conversion | 94.65% | ||
| Profit Quality | 105.94% | ||
| Current Ratio | 3.69 | ||
| Quick Ratio | 2.69 | ||
| Altman-Z | 18.25 |
F-Score6
WACC11.22%
ROIC/WACC1.52
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 Y10.63%
EPS Next 2Y9.26%
EPS Next 3Y9.88%
EPS Next 5Y13.59%
Revenue 1Y (TTM)-3.75%
Revenue growth 3Y2.07%
Revenue growth 5Y5.13%
Sales Q2Q%-3.17%
Revenue Next Year5.92%
Revenue Next 2Y5.36%
Revenue Next 3Y5.98%
Revenue Next 5Y11.6%
EBIT growth 1Y-12.93%
EBIT growth 3Y2.38%
EBIT growth 5Y6.08%
EBIT Next Year20.97%
EBIT Next 3Y12.21%
EBIT Next 5Y15.83%
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%