WW GRAINGER INC (GWW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GWW - US3848021040 - Common Stock
1057.86 USD
-8.77 (-0.82%)
1057.86 USD
0 (0%)
Overall GWW gets a fundamental rating of 6 out of 10. We evaluated GWW against 50 industry peers in the Trading Companies & Distributors industry. Both the health and profitability get an excellent rating, making GWW a very profitable company, without any liquidiy or solvency issues. GWW is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- GWW had positive earnings in the past year.
- 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.
- The Return On Equity of GWW (48.58%) is better than 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.
- The Average Return On Invested Capital over the past 3 years for GWW is significantly above the industry average of 9.64%.
| 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
- GWW has a better Profit Margin (9.75%) than 78.00% of its industry peers.
- In the last couple of years the Profit Margin of GWW has grown nicely.
- The Operating Margin of GWW (14.05%) is better than 76.00% of its industry peers.
- In the last couple of years the Operating Margin of GWW has grown nicely.
- With a decent Gross Margin value of 39.09%, GWW is doing good in 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so GWW is creating value.
- GWW has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for GWW has been reduced compared to 5 years ago.
- 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.
- GWW's Altman-Z score of 11.43 is amongst the best of the industry. GWW outperforms 98.00% of its industry peers.
- GWW has a debt to FCF ratio of 1.92. This is a very positive value and a sign of high solvency as it would only need 1.92 years to pay back of all of its debts.
- GWW has a Debt to FCF ratio of 1.92. This is amongst the best in the industry. GWW outperforms 82.00% of its industry peers.
- GWW has a Debt/Equity ratio of 0.66. This is a neutral value indicating GWW is somewhat dependend on debt financing.
- GWW has a Debt to Equity ratio of 0.66. This is comparable to the rest of the industry: GWW outperforms 50.00% of its industry peers.
- Even though the debt/equity ratio score it not favorable for GWW, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 1.92 | ||
| Altman-Z | 11.43 |
ROIC/WACC2.88
WACC9.7%
2.3 Liquidity
- A Current Ratio of 2.72 indicates that GWW has no problem at all paying 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.
- A Quick Ratio of 1.59 indicates that GWW should not have too much problems paying its short term obligations.
- With a decent Quick ratio value of 1.59, GWW is doing good in the industry, outperforming 62.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.72 | ||
| Quick Ratio | 1.59 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 5.77% over the past year.
- GWW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.64% yearly.
- The Revenue has been growing slightly by 4.83% in the past year.
- GWW shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.37% yearly.
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
- Based on estimates for the next years, GWW will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.39% on average per year.
- The Revenue is expected to grow by 6.65% on average over the next years.
EPS Next Y2.44%
EPS Next 2Y6.67%
EPS Next 3Y8.1%
EPS Next 5Y9.39%
Revenue Next Year4.32%
Revenue Next 2Y4.72%
Revenue Next 3Y5.3%
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.
- 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 26.61, GWW can be considered very expensive at the moment.
- GWW's Price/Earnings ratio is in line with the industry average.
- GWW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
- A Price/Forward Earnings ratio of 23.86 indicates a rather expensive valuation of GWW.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of GWW is on the same level as its industry peers.
- GWW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.61 | ||
| Fwd PE | 23.86 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as GWW.
- Based on the Price/Free Cash Flow ratio, GWW is valued a bit cheaper than 62.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.83 | ||
| EV/EBITDA | 18.99 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- GWW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)10.89
PEG (5Y)1.51
EPS Next 2Y6.67%
EPS Next 3Y8.1%
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 1.31, GWW pays a bit more dividend than its industry peers.
- With a Dividend Yield of 0.85, GWW pays less dividend than the S&P500 average, which is at 1.81.
| 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
- 26.47% 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 earnings are growing more, so the dividend growth is sustainable.
DP26.47%
EPS Next 2Y6.67%
EPS Next 3Y8.1%
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 2.44% in the next year.