WW GRAINGER INC (GWW) Stock Fundamental Analysis
NYSE:GWW - New York Stock Exchange, Inc. - US3848021040 - Common Stock - Currency: USD
Taking everything into account, GWW scores 6 out of 10 in our fundamental rating. GWW was compared to 48 industry peers in the Trading Companies & Distributors industry. GWW scores excellent points on both the profitability and health parts. This is a solid base for a good stock. GWW has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
GWW had positive earnings in the past year.
In the past year GWW had a positive cash flow from operations.
Each year in the past 5 years GWW has been profitable.
GWW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of GWW (20.07%) is better than 97.87% of its industry peers.
With an excellent Return On Equity value of 52.21%, GWW belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
GWW has a Return On Invested Capital of 29.07%. This is amongst the best in the industry. GWW outperforms 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GWW is significantly above the industry average of 9.69%.
The last Return On Invested Capital (29.07%) for GWW is above the 3 year average (27.96%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.07% | ||
| ROE | 52.21% | ||
| ROIC | 29.07% |
ROA(3y)19.55%
ROA(5y)16.77%
ROE(3y)59.26%
ROE(5y)52.31%
ROIC(3y)27.96%
ROIC(5y)25.71%
1.3 Margins
With an excellent Profit Margin value of 10.80%, GWW belongs to the best of the industry, outperforming 82.98% of the companies in the same industry.
GWW's Profit Margin has improved in the last couple of years.
GWW's Operating Margin of 15.28% is fine compared to the rest of the industry. GWW outperforms 72.34% of its industry peers.
In the last couple of years the Operating Margin of GWW has grown nicely.
GWW has a Gross Margin of 39.25%. This is in the better half of the industry: GWW outperforms 68.09% of its industry peers.
GWW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.28% | ||
| PM (TTM) | 10.8% | ||
| GM | 39.25% |
OM growth 3Y11.81%
OM growth 5Y5.59%
PM growth 3Y23.51%
PM growth 5Y9.76%
GM growth 3Y3.15%
GM growth 5Y0.35%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), GWW is creating value.
Compared to 1 year ago, GWW has less shares outstanding
The number of shares outstanding for GWW has been reduced compared to 5 years ago.
Compared to 1 year ago, GWW has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 11.20 indicates that GWW is not in any danger for bankruptcy at the moment.
GWW's Altman-Z score of 11.20 is amongst the best of the industry. GWW outperforms 97.87% of its industry peers.
GWW has a debt to FCF ratio of 1.48. This is a very positive value and a sign of high solvency as it would only need 1.48 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.48, GWW is in the better half of the industry, outperforming 78.72% of the companies in the same industry.
A Debt/Equity ratio of 0.65 indicates that GWW is somewhat dependend on debt financing.
GWW has a Debt to Equity ratio of 0.65. This is comparable to the rest of the industry: GWW outperforms 53.19% of its industry peers.
Although GWW does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 1.48 | ||
| Altman-Z | 11.2 |
ROIC/WACC2.5
WACC11.61%
2.3 Liquidity
GWW has a Current Ratio of 2.59. This indicates that GWW is financially healthy and has no problem in meeting its short term obligations.
GWW has a better Current ratio (2.59) than 68.09% of its industry peers.
A Quick Ratio of 1.68 indicates that GWW should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.68, GWW is in the better half of the industry, outperforming 76.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.68 |
3. Growth
3.1 Past
GWW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.98%.
GWW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.02% yearly.
Looking at the last year, GWW shows a small growth in Revenue. The Revenue has grown by 3.99% in the last year.
Measured over the past years, GWW shows a small growth in Revenue. The Revenue has been growing by 7.99% on average per year.
EPS 1Y (TTM)5.98%
EPS 3Y31.36%
EPS 5Y17.02%
EPS Q2Q%4.67%
Revenue 1Y (TTM)3.99%
Revenue growth 3Y11.78%
Revenue growth 5Y7.99%
Sales Q2Q%4.28%
3.2 Future
GWW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.35% yearly.
The Revenue is expected to grow by 5.30% on average over the next years.
EPS Next Y7.46%
EPS Next 2Y7.79%
EPS Next 3Y8.55%
EPS Next 5Y6.35%
Revenue Next Year4%
Revenue Next 2Y4.96%
Revenue Next 3Y5.71%
Revenue Next 5Y5.3%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
A Price/Earnings ratio of 27.77 indicates a quite expensive valuation of GWW.
GWW's Price/Earnings ratio is a bit more expensive when compared to the industry. GWW is more expensive than 65.96% of the companies in the same industry.
When comparing the Price/Earnings ratio of GWW to the average of the S&P500 Index (28.51), we can say GWW is valued inline with the index average.
The Price/Forward Earnings ratio is 24.51, which indicates a rather expensive current valuation of GWW.
Based on the Price/Forward Earnings ratio, GWW is valued a bit more expensive than the industry average as 65.96% of the companies are valued more cheaply.
GWW is valuated cheaply when we compare the Price/Forward Earnings ratio to 93.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.77 | ||
| Fwd PE | 24.51 |
4.2 Price Multiples
74.47% of the companies in the same industry are cheaper than GWW, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GWW indicates a somewhat cheap valuation: GWW is cheaper than 63.83% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.08 | ||
| EV/EBITDA | 19.96 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of GWW may justify a higher PE ratio.
PEG (NY)3.72
PEG (5Y)1.63
EPS Next 2Y7.79%
EPS Next 3Y8.55%
5. Dividend
5.1 Amount
With a yearly dividend of 0.73%, GWW is not a good candidate for dividend investing.
GWW's Dividend Yield is comparable with the industry average which is at 1.83.
With a Dividend Yield of 0.73, GWW pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
5.2 History
On average, the dividend of GWW grows each year by 6.92%, which is quite nice.
GWW has paid a dividend for at least 10 years, which is a reliable track record.
GWW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.92%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
22.58% of the earnings are spent on dividend by GWW. This is a low number and sustainable payout ratio.
The dividend of GWW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP22.58%
EPS Next 2Y7.79%
EPS Next 3Y8.55%
WW GRAINGER INC
NYSE:GWW (1/31/2025, 11:43:06 AM)
1043.77
-82.3 (-7.31%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners73.82%
Inst Owner Change-0.31%
Ins Owners6.01%
Ins Owner Change0.32%
Market Cap50.83B
Analysts66.09
Price Target1128.47 (8.11%)
Short Float %3.49%
Short Ratio6.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
Yearly Dividend7.87
Dividend Growth(5Y)6.92%
DP22.58%
Div Incr Years34
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.56%
Min EPS beat(2)-1.99%
Max EPS beat(2)0.86%
EPS beat(4)2
Avg EPS beat(4)0.07%
Min EPS beat(4)-1.99%
Max EPS beat(4)2.4%
EPS beat(8)6
Avg EPS beat(8)2.27%
EPS beat(12)10
Avg EPS beat(12)4.6%
EPS beat(16)12
Avg EPS beat(16)3.09%
Revenue beat(2)0
Avg Revenue beat(2)-1.54%
Min Revenue beat(2)-1.8%
Max Revenue beat(2)-1.28%
Revenue beat(4)0
Avg Revenue beat(4)-1.66%
Min Revenue beat(4)-2.01%
Max Revenue beat(4)-1.28%
Revenue beat(8)0
Avg Revenue beat(8)-1.27%
Revenue beat(12)4
Avg Revenue beat(12)-0.15%
Revenue beat(16)6
Avg Revenue beat(16)-0.19%
PT rev (1m)0.01%
PT rev (3m)7.38%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.23%
EPS NY rev (1m)0%
EPS NY rev (3m)0.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.7%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.77 | ||
| Fwd PE | 24.51 | ||
| P/S | 3 | ||
| P/FCF | 27.08 | ||
| P/OCF | 22.23 | ||
| P/B | 14.51 | ||
| P/tB | 17.59 | ||
| EV/EBITDA | 19.96 |
EPS(TTM)37.58
EY3.6%
EPS(NY)42.58
Fwd EY4.08%
FCF(TTM)38.54
FCFY3.69%
OCF(TTM)46.96
OCFY4.5%
SpS347.68
BVpS71.93
TBVpS59.34
PEG (NY)3.72
PEG (5Y)1.63
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.07% | ||
| ROE | 52.21% | ||
| ROCE | 38.43% | ||
| ROIC | 29.07% | ||
| ROICexc | 37.04% | ||
| ROICexgc | 41.9% | ||
| OM | 15.28% | ||
| PM (TTM) | 10.8% | ||
| GM | 39.25% | ||
| FCFM | 11.09% |
ROA(3y)19.55%
ROA(5y)16.77%
ROE(3y)59.26%
ROE(5y)52.31%
ROIC(3y)27.96%
ROIC(5y)25.71%
ROICexc(3y)30.17%
ROICexc(5y)28.02%
ROICexgc(3y)34.11%
ROICexgc(5y)32.35%
ROCE(3y)36.97%
ROCE(5y)34.06%
ROICexcg growth 3Y12.15%
ROICexcg growth 5Y2.26%
ROICexc growth 3Y13.8%
ROICexc growth 5Y5.77%
OM growth 3Y11.81%
OM growth 5Y5.59%
PM growth 3Y23.51%
PM growth 5Y9.76%
GM growth 3Y3.15%
GM growth 5Y0.35%
F-Score5
Asset Turnover1.86
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 1.48 | ||
| Debt/EBITDA | 0.81 | ||
| Cap/Depr | 180.62% | ||
| Cap/Sales | 2.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 81.27% | ||
| Profit Quality | 102.62% | ||
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.68 | ||
| Altman-Z | 11.2 |
F-Score5
WACC11.61%
ROIC/WACC2.5
Cap/Depr(3y)154.59%
Cap/Depr(5y)133.7%
Cap/Sales(3y)2.11%
Cap/Sales(5y)1.99%
Profit Quality(3y)73.91%
Profit Quality(5y)90.33%
High Growth Momentum
Growth
EPS 1Y (TTM)5.98%
EPS 3Y31.36%
EPS 5Y17.02%
EPS Q2Q%4.67%
EPS Next Y7.46%
EPS Next 2Y7.79%
EPS Next 3Y8.55%
EPS Next 5Y6.35%
Revenue 1Y (TTM)3.99%
Revenue growth 3Y11.78%
Revenue growth 5Y7.99%
Sales Q2Q%4.28%
Revenue Next Year4%
Revenue Next 2Y4.96%
Revenue Next 3Y5.71%
Revenue Next 5Y5.3%
EBIT growth 1Y2.21%
EBIT growth 3Y24.99%
EBIT growth 5Y14.03%
EBIT Next Year12.27%
EBIT Next 3Y9.2%
EBIT Next 5Y5.55%
FCF growth 1Y104.02%
FCF growth 3Y19.65%
FCF growth 5Y14.16%
OCF growth 1Y92.83%
OCF growth 3Y21.84%
OCF growth 5Y13.95%