WW GRAINGER INC (GWW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GWW - US3848021040 - Common Stock
1066.63 USD
+8.05 (+0.76%)
1066.63 USD
0 (0%)
Taking everything into account, GWW scores 6 out of 10 in our fundamental rating. GWW was compared to 50 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 is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year GWW was profitable.
- GWW had a positive operating cash flow in the past year.
- 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
- GWW's Return On Assets of 19.55% is amongst the best of the industry. GWW outperforms 98.00% of its industry peers.
- GWW has a Return On Equity of 48.58%. This is amongst the best in the industry. GWW outperforms 94.00% of its industry peers.
- GWW has a Return On Invested Capital of 27.94%. This is amongst the best in the industry. GWW outperforms 98.00% 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 9.63%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.55% | ||
| ROE | 48.58% | ||
| ROIC | 27.94% |
ROA(3y)21.49%
ROA(5y)18.26%
ROE(3y)59.66%
ROE(5y)54.53%
ROIC(3y)30.88%
ROIC(5y)27.39%
1.3 Margins
- Looking at the Profit Margin, with a value of 9.75%, GWW is in the better half of the industry, outperforming 78.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of GWW has grown nicely.
- With a decent Operating Margin value of 14.05%, GWW is doing good in the industry, outperforming 76.00% of the companies in the same industry.
- In the last couple of years the Operating Margin of GWW has grown nicely.
- Looking at the Gross Margin, with a value of 39.09%, GWW is in the better half of the industry, outperforming 74.00% of the companies in the same industry.
- In the last couple of years the Gross Margin of GWW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.05% | ||
| PM (TTM) | 9.75% | ||
| GM | 39.09% |
OM growth 3Y9.16%
OM growth 5Y5.04%
PM growth 3Y11.56%
PM growth 5Y8.51%
GM growth 3Y2.79%
GM growth 5Y0.56%
2. Health
2.1 Basic Checks
- GWW has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- Compared to 1 year ago, GWW has less shares outstanding
- Compared to 5 years ago, GWW has less shares outstanding
- The debt/assets ratio for GWW is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 11.43 indicates that GWW is not in any danger for bankruptcy at the moment.
- With an excellent Altman-Z score value of 11.43, GWW belongs to the best of the industry, outperforming 98.00% of the companies in the same industry.
- The Debt to FCF ratio of GWW is 1.92, which is an excellent value as it means it would take GWW, only 1.92 years of fcf income to pay off all of its debts.
- GWW's Debt to FCF ratio of 1.92 is amongst the best of the industry. GWW outperforms 82.00% of its industry peers.
- A Debt/Equity ratio of 0.66 indicates that GWW is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.66, GWW is in line with its industry, outperforming 50.00% of the companies in the same industry.
- 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 | 0.66 | ||
| Debt/FCF | 1.92 | ||
| Altman-Z | 11.43 |
ROIC/WACC2.88
WACC9.71%
2.3 Liquidity
- GWW has a Current Ratio of 2.72. This indicates that GWW is financially healthy and has no problem in meeting its short term obligations.
- Looking at the Current ratio, with a value of 2.72, GWW is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
- GWW has a Quick Ratio of 1.59. This is a normal value and indicates that GWW is financially healthy and should not expect problems in meeting its short term obligations.
- GWW has a Quick ratio of 1.59. This is in the better half of the industry: GWW outperforms 62.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.72 | ||
| Quick Ratio | 1.59 |
3. Growth
3.1 Past
- GWW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.77%.
- Measured over the past years, GWW shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.64% on average per year.
- Looking at the last year, GWW shows a small growth in Revenue. The Revenue has grown by 4.83% in the last year.
- Measured over the past years, GWW shows a quite strong growth in Revenue. The Revenue has been growing by 8.37% on average per year.
EPS 1Y (TTM)5.77%
EPS 3Y25.23%
EPS 5Y17.64%
EPS Q2Q%3.44%
Revenue 1Y (TTM)4.83%
Revenue growth 3Y9.65%
Revenue growth 5Y8.37%
Sales Q2Q%6.13%
3.2 Future
- The Earnings Per Share is expected to grow by 9.39% on average over the next years. This is quite good.
- The Revenue is expected to grow by 6.65% on average over the next years.
EPS Next Y2.39%
EPS Next 2Y6.56%
EPS Next 3Y8.03%
EPS Next 5Y9.39%
Revenue Next Year4.29%
Revenue Next 2Y4.7%
Revenue Next 3Y5.31%
Revenue Next 5Y6.65%
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
- A Price/Earnings ratio of 26.83 indicates a quite expensive valuation of GWW.
- GWW's Price/Earnings ratio is in line with the industry average.
- GWW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.32, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 24.11, the valuation of GWW can be described as rather expensive.
- The rest of the industry has a similar Price/Forward Earnings ratio as GWW.
- GWW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.83 | ||
| Fwd PE | 24.11 |
4.2 Price Multiples
- GWW's Enterprise Value to EBITDA ratio is in line with the industry average.
- 62.00% of the companies in the same industry are more expensive than GWW, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.17 | ||
| EV/EBITDA | 19 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates GWW does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of GWW may justify a higher PE ratio.
PEG (NY)11.23
PEG (5Y)1.52
EPS Next 2Y6.56%
EPS Next 3Y8.03%
5. Dividend
5.1 Amount
- GWW has a yearly dividend return of 0.85%, which is pretty low.
- Compared to an average industry Dividend Yield of 1.49, GWW pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.83, GWW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
5.2 History
- The dividend of GWW is nicely growing with an annual growth rate of 7.57%!
- GWW has been paying a dividend for at least 10 years, so it has a reliable track record.
- GWW has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.57%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- GWW pays out 26.47% of its income as dividend. This is a sustainable payout ratio.
- GWW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP26.47%
EPS Next 2Y6.56%
EPS Next 3Y8.03%
WW GRAINGER INC / GWW FAQ
Can you provide the ChartMill fundamental rating for WW GRAINGER INC?
ChartMill assigns a fundamental rating of 6 / 10 to GWW.
What is the valuation status for GWW stock?
ChartMill assigns a valuation rating of 3 / 10 to WW GRAINGER INC (GWW). This can be considered as Overvalued.
What is the profitability of GWW stock?
WW GRAINGER INC (GWW) has a profitability rating of 8 / 10.
How financially healthy is WW GRAINGER INC?
The financial health rating of WW GRAINGER INC (GWW) is 8 / 10.
Can you provide the expected EPS growth for GWW stock?
The Earnings per Share (EPS) of WW GRAINGER INC (GWW) is expected to grow by 2.39% in the next year.