GRAHAM HOLDINGS CO-CLASS B (GHC) Stock Fundamental Analysis
NYSE:GHC - New York Stock Exchange, Inc. - US3846371041 - Common Stock
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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year GHC was profitable.
GHC had a positive operating cash flow in the past year.
GHC had positive earnings in each of the past 5 years.
Each year in the past 5 years GHC had a positive operating cash flow.
1.2 Ratios
GHC's Return On Assets of 4.73% is fine compared to the rest of the industry. GHC outperforms 69.84% of its industry peers.
GHC's Return On Equity of 8.77% is fine compared to the rest of the industry. GHC outperforms 63.49% of its industry peers.
GHC has a Return On Invested Capital (2.59%) which is comparable to the rest of the industry.
GHC had an Average Return On Invested Capital over the past 3 years of 1.83%. This is significantly below the industry average of 11.87%.
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
Looking at the Profit Margin, with a value of 5.99%, GHC is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
In the last couple of years the Profit Margin of GHC has declined.
GHC has a Operating Margin (4.19%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of GHC has declined.
The Gross Margin of GHC (29.66%) is worse than 66.67% of its industry peers.
GHC's Gross Margin has declined in the last couple of years.
| 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
GHC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
An Altman-Z score of 3.12 indicates that GHC is not in any danger for bankruptcy at the moment.
GHC has a better Altman-Z score (3.12) than 76.19% of its industry peers.
The Debt to FCF ratio of GHC is 3.46, which is a good value as it means it would take GHC, 3.46 years of fcf income to pay off all of its debts.
GHC's Debt to FCF ratio of 3.46 is fine compared to the rest of the industry. GHC outperforms 68.25% 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 | 3.12 |
ROIC/WACC0.22
WACC11.58%
2.3 Liquidity
A Current Ratio of 1.57 indicates that GHC should not have too much problems paying its short term obligations.
GHC has a Current ratio of 1.57. This is comparable to the rest of the industry: GHC outperforms 55.56% of its industry peers.
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.
Looking at the Quick ratio, with a value of 1.34, GHC is in line with its industry, outperforming 50.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
GHC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.06%.
GHC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.56% yearly.
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.
GHC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.01% yearly.
EPS Next Y36.53%
EPS Next 2Y7.63%
EPS Next 3Y16.97%
EPS Next 5Y10.43%
Revenue Next Year8.96%
Revenue Next 2Y5.32%
Revenue Next 3Y5.58%
Revenue Next 5Y5.01%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.37, GHC is valued on the expensive side.
Based on the Price/Earnings ratio, GHC is valued a bit cheaper than 77.78% of the companies in the same industry.
When comparing the Price/Earnings ratio of GHC to the average of the S&P500 Index (27.96), we can say GHC is valued slightly cheaper.
The Price/Forward Earnings ratio is 18.30, which indicates a rather expensive current valuation of GHC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GHC indicates a somewhat cheap valuation: GHC is cheaper than 71.43% of the companies listed in the same industry.
GHC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.11.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.37 | ||
| Fwd PE | 18.3 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GHC is valued cheaply inside the industry as 82.54% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, GHC is valued cheaper than 84.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.19 | ||
| EV/EBITDA | 7.19 |
4.3 Compensation for Growth
GHC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GHC's earnings are expected to grow with 16.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.48
PEG (5Y)N/A
EPS Next 2Y7.63%
EPS Next 3Y16.97%
5. Dividend
5.1 Amount
GHC has a yearly dividend return of 0.76%, which is pretty low.
GHC's Dividend Yield is rather good when compared to the industry average which is at 4.24. GHC pays more dividend than 82.54% 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 | 0.76% |
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
GHC pays out 8.64% of its income as dividend. This is a sustainable payout ratio.
GHC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP8.64%
EPS Next 2Y7.63%
EPS Next 3Y16.97%
GRAHAM HOLDINGS CO-CLASS B
NYSE:GHC (1/17/2025, 8:04:00 PM)
After market: 905.5 0 (0%)905.5
+5.07 (+0.56%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners82.99%
Inst Owner Change0%
Ins Owners6.43%
Ins Owner Change5.33%
Market Cap3.92B
Analysts42.5
Price Target698.7 (-22.84%)
Short Float %1.3%
Short Ratio2.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
Yearly Dividend6.68
Dividend Growth(5Y)4.76%
DP8.64%
Div Incr Years8
Div Non Decr Years8
Ex-DateN/A
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)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.99%
EPS NY rev (1m)9.48%
EPS NY rev (3m)9.48%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.79%
Revenue NY rev (1m)-0.35%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.37 | ||
| Fwd PE | 18.3 | ||
| P/S | 0.67 | ||
| P/FCF | 15.19 | ||
| P/OCF | 11.27 | ||
| P/B | 0.98 | ||
| P/tB | 1.77 | ||
| EV/EBITDA | 7.19 |
EPS(TTM)52.13
EY5.76%
EPS(NY)49.49
Fwd EY5.47%
FCF(TTM)59.6
FCFY6.58%
OCF(TTM)80.38
OCFY8.88%
SpS1354.41
BVpS924.78
TBVpS511.56
PEG (NY)0.48
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 | 3.12 |
F-Score5
WACC11.58%
ROIC/WACC0.22
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 Y36.53%
EPS Next 2Y7.63%
EPS Next 3Y16.97%
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 Year116.65%
EBIT Next 3Y32.56%
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%