GRAHAM HOLDINGS CO-CLASS B (GHC) Stock Fundamental Analysis
NYSE:GHC - New York Stock Exchange, Inc. - US3846371041 - Common Stock - Currency: USD
Overall GHC gets a fundamental rating of 6 out of 10. We evaluated GHC against 71 industry peers in the Diversified Consumer Services industry. While GHC has a great profitability rating, there are some minor concerns on its financial health. GHC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year GHC was profitable.
In the past year GHC had a positive cash flow from operations.
Each year in the past 5 years GHC has been profitable.
GHC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of GHC (9.76%) is better than 83.10% of its industry peers.
The Return On Equity of GHC (17.31%) is better than 83.10% of its industry peers.
The Return On Invested Capital of GHC (3.50%) is better than 61.97% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GHC is significantly below the industry average of 10.64%.
The 3 year average ROIC (2.58%) for GHC is below the current ROIC(3.50%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.76% | ||
| ROE | 17.31% | ||
| ROIC | 3.5% |
ROA(3y)4.41%
ROA(5y)4.52%
ROE(3y)7.94%
ROE(5y)7.94%
ROIC(3y)2.58%
ROIC(5y)2.13%
1.3 Margins
GHC has a better Profit Margin (12.48%) than 78.87% of its industry peers.
GHC's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 5.25%, GHC is in the better half of the industry, outperforming 61.97% of the companies in the same industry.
GHC's Operating Margin has been stable in the last couple of years.
GHC has a Gross Margin of 30.43%. This is in the lower half of the industry: GHC underperforms 63.38% of its industry peers.
GHC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.25% | ||
| PM (TTM) | 12.48% | ||
| GM | 30.43% |
OM growth 3Y16.95%
OM growth 5Y1.11%
PM growth 3Y11.02%
PM growth 5Y6.2%
GM growth 3Y-3.09%
GM growth 5Y-0.25%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GHC is destroying value.
GHC has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, GHC has less shares outstanding
GHC has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.24 indicates that GHC is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.24, GHC is doing good in the industry, outperforming 73.24% of the companies in the same industry.
GHC has a debt to FCF ratio of 2.34. This is a good value and a sign of high solvency as GHC would need 2.34 years to pay back of all of its debts.
GHC's Debt to FCF ratio of 2.34 is fine compared to the rest of the industry. GHC outperforms 76.06% of its industry peers.
GHC has a Debt/Equity ratio of 0.17. This is a healthy value indicating a solid balance between debt and equity.
GHC has a Debt to Equity ratio (0.17) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 3.24 |
ROIC/WACC0.41
WACC8.49%
2.3 Liquidity
A Current Ratio of 1.62 indicates that GHC should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.62, GHC is doing good in the industry, outperforming 60.56% of the companies in the same industry.
A Quick Ratio of 1.41 indicates that GHC should not have too much problems paying its short term obligations.
GHC has a Quick ratio (1.41) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.41 |
3. Growth
3.1 Past
GHC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.72%, which is quite impressive.
The Earnings Per Share has been growing by 13.67% on average over the past years. This is quite good.
Looking at the last year, GHC shows a small growth in Revenue. The Revenue has grown by 6.99% in the last year.
The Revenue has been growing by 10.32% on average over the past years. This is quite good.
EPS 1Y (TTM)40.72%
EPS 3Y22.67%
EPS 5Y13.67%
EPS Q2Q%3.56%
Revenue 1Y (TTM)6.99%
Revenue growth 3Y14.57%
Revenue growth 5Y10.32%
Sales Q2Q%1.15%
3.2 Future
The Earnings Per Share is expected to decrease by -1.28% on average over the next years.
Based on estimates for the next years, GHC will show a small growth in Revenue. The Revenue will grow by 2.87% on average per year.
EPS Next Y-26.99%
EPS Next 2Y1.23%
EPS Next 3Y-1.28%
EPS Next 5YN/A
Revenue Next Year-0.93%
Revenue Next 2Y2.67%
Revenue Next 3Y2.87%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
GHC is valuated correctly with a Price/Earnings ratio of 14.36.
Based on the Price/Earnings ratio, GHC is valued cheaply inside the industry as 84.51% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.30, GHC is valued a bit cheaper.
GHC is valuated correctly with a Price/Forward Earnings ratio of 14.10.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GHC indicates a somewhat cheap valuation: GHC is cheaper than 78.87% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. GHC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.36 | ||
| Fwd PE | 14.1 |
4.2 Price Multiples
87.32% of the companies in the same industry are more expensive than GHC, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, GHC is valued cheaply inside the industry as 90.14% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.72 | ||
| EV/EBITDA | 6.06 |
4.3 Compensation for Growth
The decent profitability rating of GHC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.05
EPS Next 2Y1.23%
EPS Next 3Y-1.28%
5. Dividend
5.1 Amount
GHC has a yearly dividend return of 0.78%, which is pretty low.
GHC's Dividend Yield is rather good when compared to the industry average which is at 3.85. GHC pays more dividend than 84.51% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, GHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.78% |
5.2 History
The dividend of GHC has a limited annual growth rate of 4.28%.
GHC has paid a dividend for at least 10 years, which is a reliable track record.
As GHC did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)4.28%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
4.10% of the earnings are spent on dividend by GHC. This is a low number and sustainable payout ratio.
DP4.1%
EPS Next 2Y1.23%
EPS Next 3Y-1.28%
921.47
-5.54 (-0.6%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners81.05%
Inst Owner Change-0.02%
Ins Owners6.6%
Ins Owner Change0.57%
Market Cap4.02B
Analysts42.5
Price Target800.7 (-13.11%)
Short Float %1.52%
Short Ratio1.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.78% |
Yearly Dividend6.89
Dividend Growth(5Y)4.28%
DP4.1%
Div Incr Years8
Div Non Decr Years8
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.57%
Min EPS beat(2)1.07%
Max EPS beat(2)2.08%
EPS beat(4)4
Avg EPS beat(4)14.64%
Min EPS beat(4)1.07%
Max EPS beat(4)43.87%
EPS beat(8)7
Avg EPS beat(8)16.47%
EPS beat(12)9
Avg EPS beat(12)12.96%
EPS beat(16)11
Avg EPS beat(16)8.84%
Revenue beat(2)0
Avg Revenue beat(2)-3.24%
Min Revenue beat(2)-3.72%
Max Revenue beat(2)-2.75%
Revenue beat(4)1
Avg Revenue beat(4)-2.17%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.53%
Revenue beat(8)3
Avg Revenue beat(8)-0.73%
Revenue beat(12)6
Avg Revenue beat(12)0.35%
Revenue beat(16)9
Avg Revenue beat(16)6.87%
PT rev (1m)0%
PT rev (3m)2.61%
EPS NQ rev (1m)5.07%
EPS NQ rev (3m)-17.21%
EPS NY rev (1m)-7.8%
EPS NY rev (3m)-7.8%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.65%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.36 | ||
| Fwd PE | 14.1 | ||
| P/S | 0.67 | ||
| P/FCF | 10.72 | ||
| P/OCF | 8.89 | ||
| P/B | 0.94 | ||
| P/tB | 1.56 | ||
| EV/EBITDA | 6.06 |
EPS(TTM)64.17
EY6.96%
EPS(NY)65.35
Fwd EY7.09%
FCF(TTM)85.96
FCFY9.33%
OCF(TTM)103.66
OCFY11.25%
SpS1366.24
BVpS984.96
TBVpS590
PEG (NY)N/A
PEG (5Y)1.05
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.76% | ||
| ROE | 17.31% | ||
| ROCE | 4.91% | ||
| ROIC | 3.5% | ||
| ROICexc | 4.2% | ||
| ROICexgc | 6.22% | ||
| OM | 5.25% | ||
| PM (TTM) | 12.48% | ||
| GM | 30.43% | ||
| FCFM | 6.29% |
ROA(3y)4.41%
ROA(5y)4.52%
ROE(3y)7.94%
ROE(5y)7.94%
ROIC(3y)2.58%
ROIC(5y)2.13%
ROICexc(3y)3.05%
ROICexc(5y)2.54%
ROICexgc(3y)4.81%
ROICexgc(5y)4.06%
ROCE(3y)3.62%
ROCE(5y)3%
ROICexcg growth 3Y29.13%
ROICexcg growth 5Y2.01%
ROICexc growth 3Y33.45%
ROICexc growth 5Y5.67%
OM growth 3Y16.95%
OM growth 5Y1.11%
PM growth 3Y11.02%
PM growth 5Y6.2%
GM growth 3Y-3.09%
GM growth 5Y-0.25%
F-Score8
Asset Turnover0.78
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 2.34 | ||
| Debt/EBITDA | 1.51 | ||
| Cap/Depr | 45.62% | ||
| Cap/Sales | 1.29% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 93.78% | ||
| Profit Quality | 50.41% | ||
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.41 | ||
| Altman-Z | 3.24 |
F-Score8
WACC8.49%
ROIC/WACC0.41
Cap/Depr(3y)39.68%
Cap/Depr(5y)52.48%
Cap/Sales(3y)1.98%
Cap/Sales(5y)2.69%
Profit Quality(3y)118.63%
Profit Quality(5y)82.91%
High Growth Momentum
Growth
EPS 1Y (TTM)40.72%
EPS 3Y22.67%
EPS 5Y13.67%
EPS Q2Q%3.56%
EPS Next Y-26.99%
EPS Next 2Y1.23%
EPS Next 3Y-1.28%
EPS Next 5YN/A
Revenue 1Y (TTM)6.99%
Revenue growth 3Y14.57%
Revenue growth 5Y10.32%
Sales Q2Q%1.15%
Revenue Next Year-0.93%
Revenue Next 2Y2.67%
Revenue Next 3Y2.87%
Revenue Next 5YN/A
EBIT growth 1Y53.41%
EBIT growth 3Y33.98%
EBIT growth 5Y11.54%
EBIT Next Year14.01%
EBIT Next 3Y10.33%
EBIT Next 5YN/A
FCF growth 1Y205.98%
FCF growth 3Y101.03%
FCF growth 5Y35.22%
OCF growth 1Y111.66%
OCF growth 3Y26.21%
OCF growth 5Y19.76%