GRAHAM HOLDINGS CO-CLASS B (GHC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GHC - US3846371041 - Common Stock
1143.07 USD
-11.24 (-0.97%)
1150.5 USD
+7.43 (+0.65%)
We assign a fundamental rating of 6 out of 10 to GHC. GHC was compared to 76 industry peers in the Diversified Consumer Services industry. GHC is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. GHC has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- GHC had positive earnings in the past year.
- In the past year GHC had a positive cash flow from operations.
- Each year in the past 5 years GHC has been profitable.
- In the past 5 years GHC always reported a positive cash flow from operatings.
1.2 Ratios
- With a decent Return On Assets value of 9.27%, GHC is doing good in the industry, outperforming 78.95% of the companies in the same industry.
- GHC's Return On Equity of 16.32% is fine compared to the rest of the industry. GHC outperforms 75.00% of its industry peers.
- GHC has a Return On Invested Capital of 3.30%. This is comparable to the rest of the industry: GHC outperforms 55.26% of its industry peers.
- GHC had an Average Return On Invested Capital over the past 3 years of 2.58%. This is significantly below the industry average of 10.15%.
- The 3 year average ROIC (2.58%) for GHC is below the current ROIC(3.30%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.27% | ||
| ROE | 16.32% | ||
| ROIC | 3.3% |
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 Profit Margin of 14.83%. This is amongst the best in the industry. GHC outperforms 84.21% of its industry peers.
- GHC's Profit Margin has improved in the last couple of years.
- GHC has a Operating Margin (5.82%) which is comparable to the rest of the industry.
- In the last couple of years the Operating Margin of GHC has remained more or less at the same level.
- GHC's Gross Margin of 30.52% is on the low side compared to the rest of the industry. GHC is outperformed by 63.16% of its industry peers.
- GHC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.82% | ||
| PM (TTM) | 14.83% | ||
| GM | 30.52% |
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
- 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
- GHC has a better debt/assets ratio than last year.
2.2 Solvency
- GHC has an Altman-Z score of 3.17. This indicates that GHC is financially healthy and has little risk of bankruptcy at the moment.
- GHC's Altman-Z score of 3.17 is fine compared to the rest of the industry. GHC outperforms 73.68% of its industry peers.
- GHC has a debt to FCF ratio of 2.07. This is a good value and a sign of high solvency as GHC would need 2.07 years to pay back of all of its debts.
- The Debt to FCF ratio of GHC (2.07) is better than 80.26% of its industry peers.
- GHC has a Debt/Equity ratio of 0.07. This is a healthy value indicating a solid balance between debt and equity.
- GHC has a better Debt to Equity ratio (0.07) than 64.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 2.07 | ||
| Altman-Z | 3.17 |
ROIC/WACC0.4
WACC8.35%
2.3 Liquidity
- GHC has a Current Ratio of 1.32. 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 Current ratio, with a value of 1.32, GHC is in line with its industry, outperforming 56.58% of the companies in the same industry.
- GHC has a Quick Ratio of 1.14. 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 (1.14) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.32 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 18.49% over the past year.
- GHC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.67% yearly.
- GHC shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -16.34%.
- The Revenue has been growing by 10.32% on average over the past years. This is quite good.
EPS 1Y (TTM)18.49%
EPS 3Y22.67%
EPS 5Y13.67%
EPS Q2Q%-23.54%
Revenue 1Y (TTM)-16.34%
Revenue growth 3Y14.57%
Revenue growth 5Y10.32%
Sales Q2Q%5.94%
3.2 Future
- GHC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.79% yearly.
- Based on estimates for the next years, GHC will show a small growth in Revenue. The Revenue will grow by 5.12% on average per year.
EPS Next Y-25.8%
EPS Next 2Y3.28%
EPS Next 3Y0.79%
EPS Next 5YN/A
Revenue Next Year3.04%
Revenue Next 2Y5.67%
Revenue Next 3Y5.12%
Revenue Next 5YN/A
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 decreasing.
- 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
- With a Price/Earnings ratio of 18.51, GHC is valued on the expensive side.
- 63.16% of the companies in the same industry are more expensive than GHC, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 28.60, GHC is valued a bit cheaper.
- The Price/Forward Earnings ratio is 16.80, which indicates a correct valuation of GHC.
- GHC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GHC is cheaper than 68.42% of the companies in the same industry.
- GHC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.51 | ||
| Fwd PE | 16.8 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GHC indicates a somewhat cheap valuation: GHC is cheaper than 73.68% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, GHC is valued a bit cheaper than 76.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.79 | ||
| EV/EBITDA | 8.31 |
4.3 Compensation for Growth
- The decent profitability rating of GHC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.35
EPS Next 2Y3.28%
EPS Next 3Y0.79%
5. Dividend
5.1 Amount
- GHC has a yearly dividend return of 0.64%, which is pretty low.
- GHC's Dividend Yield is rather good when compared to the industry average which is at 0.36. GHC pays more dividend than 84.21% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, GHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
5.2 History
- The dividend of GHC has a limited annual growth rate of 4.28%.
- GHC has been paying a dividend for at least 10 years, so it has 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
- GHC pays out 4.25% of its income as dividend. This is a sustainable payout ratio.
- The dividend of GHC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP4.25%
EPS Next 2Y3.28%
EPS Next 3Y0.79%
GRAHAM HOLDINGS CO-CLASS B / GHC FAQ
What is the ChartMill fundamental rating of GRAHAM HOLDINGS CO-CLASS B (GHC) stock?
ChartMill assigns a fundamental rating of 6 / 10 to GHC.
What is the valuation status for GHC stock?
ChartMill assigns a valuation rating of 5 / 10 to GRAHAM HOLDINGS CO-CLASS B (GHC). This can be considered as Fairly Valued.
How profitable is GRAHAM HOLDINGS CO-CLASS B (GHC) stock?
GRAHAM HOLDINGS CO-CLASS B (GHC) has a profitability rating of 6 / 10.
What is the financial health of GRAHAM HOLDINGS CO-CLASS B (GHC) stock?
The financial health rating of GRAHAM HOLDINGS CO-CLASS B (GHC) is 7 / 10.
What is the expected EPS growth for GRAHAM HOLDINGS CO-CLASS B (GHC) stock?
The Earnings per Share (EPS) of GRAHAM HOLDINGS CO-CLASS B (GHC) is expected to decline by -25.8% in the next year.