GRAHAM HOLDINGS CO-CLASS B (GHC) Stock Fundamental Analysis
NYSE:GHC - New York Stock Exchange, Inc. - US3846371041 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to GHC. GHC was compared to 71 industry peers in the Diversified Consumer Services industry. GHC has only an average score on both its financial health and profitability. GHC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
GHC had positive earnings in the past year.
GHC had a positive operating cash flow in the past year.
In the past 5 years GHC has always been profitable.
In the past 5 years GHC always reported a positive cash flow from operatings.
1.2 Ratios
GHC has a better Return On Assets (4.73%) than 70.31% of its industry peers.
The Return On Equity of GHC (8.77%) is better than 62.50% of its industry peers.
With a Return On Invested Capital value of 2.59%, GHC perfoms like the industry average, outperforming 57.81% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for GHC is significantly below the industry average of 12.02%.
The last Return On Invested Capital (2.59%) for GHC is above the 3 year average (1.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.73% | ||
| ROE | 8.77% | ||
| ROIC | 2.59% |
ROA(3y)2.86%
ROA(5y)3.74%
ROE(3y)4.96%
ROE(5y)6.53%
ROIC(3y)1.83%
ROIC(5y)1.81%
1.3 Margins
GHC has a Profit Margin of 5.99%. This is in the better half of the industry: GHC outperforms 65.63% of its industry peers.
GHC's Profit Margin has declined in the last couple of years.
GHC has a Operating Margin (4.19%) which is in line with its industry peers.
GHC's Operating Margin has declined in the last couple of years.
GHC has a worse Gross Margin (29.66%) than 65.63% of its industry peers.
In the last couple of years the Gross Margin of GHC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.19% | ||
| PM (TTM) | 5.99% | ||
| GM | 29.67% |
OM growth 3Y-5.49%
OM growth 5Y-16.55%
PM growth 3Y-23.55%
PM growth 5Y-14.31%
GM growth 3Y-4.22%
GM growth 5Y-4.5%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GHC is destroying value.
The number of shares outstanding for GHC has been reduced compared to 1 year ago.
Compared to 5 years ago, GHC has less shares outstanding
The debt/assets ratio for GHC is higher compared to a year ago.
2.2 Solvency
GHC has an Altman-Z score of 3.16. This indicates that GHC is financially healthy and has little risk of bankruptcy at the moment.
GHC's Altman-Z score of 3.16 is fine compared to the rest of the industry. GHC outperforms 78.13% of its industry peers.
GHC has a debt to FCF ratio of 3.46. This is a good value and a sign of high solvency as GHC would need 3.46 years to pay back of all of its debts.
GHC's Debt to FCF ratio of 3.46 is fine compared to the rest of the industry. GHC outperforms 70.31% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that GHC is not too dependend on debt financing.
The Debt to Equity ratio of GHC (0.21) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 3.46 | ||
| Altman-Z | 3.16 |
ROIC/WACC0.26
WACC10.13%
2.3 Liquidity
A Current Ratio of 1.57 indicates that GHC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.57, GHC perfoms like the industry average, outperforming 57.81% of the companies in the same industry.
GHC has a Quick Ratio of 1.34. This is a normal value and indicates that GHC is financially healthy and should not expect problems in meeting its short term obligations.
GHC has a Quick ratio (1.34) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.06% over the past year.
The Earnings Per Share has been decreasing by -2.56% on average over the past years.
Looking at the last year, GHC shows a quite strong growth in Revenue. The Revenue has grown by 9.75% in the last year.
GHC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.37% yearly.
EPS 1Y (TTM)3.06%
EPS 3Y10.24%
EPS 5Y-2.56%
EPS Q2Q%65.07%
Revenue 1Y (TTM)9.75%
Revenue growth 3Y15.18%
Revenue growth 5Y10.37%
Sales Q2Q%8.6%
3.2 Future
GHC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.43% yearly.
Based on estimates for the next years, GHC will show a small growth in Revenue. The Revenue will grow by 5.01% on average per year.
EPS Next Y47.76%
EPS Next 2Y8.73%
EPS Next 3Y16.8%
EPS Next 5Y10.43%
Revenue Next Year8.96%
Revenue Next 2Y5.32%
Revenue Next 3Y5.58%
Revenue Next 5Y5.01%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 17.88 indicates a rather expensive valuation of GHC.
Based on the Price/Earnings ratio, GHC is valued a bit cheaper than 71.88% of the companies in the same industry.
When comparing the Price/Earnings ratio of GHC to the average of the S&P500 Index (29.63), we can say GHC is valued slightly cheaper.
With a Price/Forward Earnings ratio of 18.46, GHC is valued on the expensive side.
GHC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GHC is cheaper than 70.31% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of GHC to the average of the S&P500 Index (22.68), we can say GHC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.88 | ||
| Fwd PE | 18.46 |
4.2 Price Multiples
81.25% of the companies in the same industry are more expensive than GHC, based on the Enterprise Value to EBITDA ratio.
82.81% of the companies in the same industry are more expensive than GHC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.64 | ||
| EV/EBITDA | 7.74 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as GHC's earnings are expected to grow with 16.80% in the coming years.
PEG (NY)0.37
PEG (5Y)N/A
EPS Next 2Y8.73%
EPS Next 3Y16.8%
5. Dividend
5.1 Amount
GHC has a yearly dividend return of 0.75%, which is pretty low.
GHC's Dividend Yield is rather good when compared to the industry average which is at 4.39. GHC pays more dividend than 84.38% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, GHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
5.2 History
The dividend of GHC has a limited annual growth rate of 4.76%.
GHC has paid a dividend for at least 10 years, which is a reliable track record.
GHC has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)4.76%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
8.64% of the earnings are spent on dividend by GHC. This is a low number and sustainable payout ratio.
GHC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP8.64%
EPS Next 2Y8.73%
EPS Next 3Y16.8%
932.09
-19.33 (-2.03%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners82.99%
Inst Owner Change-0.61%
Ins Owners6.43%
Ins Owner Change5.84%
Market Cap4.04B
Analysts42.5
Price Target780.3 (-16.28%)
Short Float %1.19%
Short Ratio2.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
Yearly Dividend6.68
Dividend Growth(5Y)4.76%
DP8.64%
Div Incr Years8
Div Non Decr Years8
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)27.71%
Min EPS beat(2)11.56%
Max EPS beat(2)43.87%
EPS beat(4)3
Avg EPS beat(4)16.52%
Min EPS beat(4)-13.55%
Max EPS beat(4)43.87%
EPS beat(8)5
Avg EPS beat(8)15.09%
EPS beat(12)9
Avg EPS beat(12)13.58%
EPS beat(16)11
Avg EPS beat(16)16.96%
Revenue beat(2)1
Avg Revenue beat(2)-1.1%
Min Revenue beat(2)-2.73%
Max Revenue beat(2)0.53%
Revenue beat(4)1
Avg Revenue beat(4)-1.45%
Min Revenue beat(4)-2.73%
Max Revenue beat(4)0.53%
Revenue beat(8)5
Avg Revenue beat(8)0.65%
Revenue beat(12)8
Avg Revenue beat(12)1.56%
Revenue beat(16)10
Avg Revenue beat(16)7.38%
PT rev (1m)11.68%
PT rev (3m)11.68%
EPS NQ rev (1m)16.79%
EPS NQ rev (3m)16.79%
EPS NY rev (1m)8.23%
EPS NY rev (3m)18.48%
Revenue NQ rev (1m)0.39%
Revenue NQ rev (3m)0.39%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.88 | ||
| Fwd PE | 18.46 | ||
| P/S | 0.69 | ||
| P/FCF | 15.64 | ||
| P/OCF | 11.6 | ||
| P/B | 1.01 | ||
| P/tB | 1.82 | ||
| EV/EBITDA | 7.74 |
EPS(TTM)52.13
EY5.59%
EPS(NY)50.5
Fwd EY5.42%
FCF(TTM)59.6
FCFY6.39%
OCF(TTM)80.38
OCFY8.62%
SpS1354.41
BVpS924.78
TBVpS511.56
PEG (NY)0.37
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.73% | ||
| ROE | 8.77% | ||
| ROCE | 4.03% | ||
| ROIC | 2.59% | ||
| ROICexc | 3.15% | ||
| ROICexgc | 4.9% | ||
| OM | 4.19% | ||
| PM (TTM) | 5.99% | ||
| GM | 29.67% | ||
| FCFM | 4.4% |
ROA(3y)2.86%
ROA(5y)3.74%
ROE(3y)4.96%
ROE(5y)6.53%
ROIC(3y)1.83%
ROIC(5y)1.81%
ROICexc(3y)2.15%
ROICexc(5y)2.14%
ROICexgc(3y)3.51%
ROICexgc(5y)3.58%
ROCE(3y)2.84%
ROCE(5y)2.81%
ROICexcg growth 3Y1.95%
ROICexcg growth 5Y-20.92%
ROICexc growth 3Y4.41%
ROICexc growth 5Y-16.15%
OM growth 3Y-5.49%
OM growth 5Y-16.55%
PM growth 3Y-23.55%
PM growth 5Y-14.31%
GM growth 3Y-4.22%
GM growth 5Y-4.5%
F-Score5
Asset Turnover0.79
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 3.46 | ||
| Debt/EBITDA | 2.14 | ||
| Cap/Depr | 57.94% | ||
| Cap/Sales | 1.53% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.83% | ||
| Profit Quality | 73.47% | ||
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 3.16 |
F-Score5
WACC10.13%
ROIC/WACC0.26
Cap/Depr(3y)57.2%
Cap/Depr(5y)58.33%
Cap/Sales(3y)3.11%
Cap/Sales(5y)2.98%
Profit Quality(3y)107.43%
Profit Quality(5y)78.3%
High Growth Momentum
Growth
EPS 1Y (TTM)3.06%
EPS 3Y10.24%
EPS 5Y-2.56%
EPS Q2Q%65.07%
EPS Next Y47.76%
EPS Next 2Y8.73%
EPS Next 3Y16.8%
EPS Next 5Y10.43%
Revenue 1Y (TTM)9.75%
Revenue growth 3Y15.18%
Revenue growth 5Y10.37%
Sales Q2Q%8.6%
Revenue Next Year8.96%
Revenue Next 2Y5.32%
Revenue Next 3Y5.58%
Revenue Next 5Y5.01%
EBIT growth 1Y6.69%
EBIT growth 3Y8.86%
EBIT growth 5Y-7.9%
EBIT Next Year117.62%
EBIT Next 3Y32.78%
EBIT Next 5Y20.78%
FCF growth 1Y98.32%
FCF growth 3Y5.66%
FCF growth 5Y-2.49%
OCF growth 1Y66.66%
OCF growth 3Y7.24%
OCF growth 5Y-1.97%