WW GRAINGER INC (GWW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GWW - US3848021040 - Common Stock
1057.56 USD
+7.59 (+0.72%)
1057.56 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 gets an excellent profitability rating and is at the same time showing great financial health properties. While showing a medium growth rate, GWW is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- In the past year GWW was profitable.
- In the past year GWW had a positive cash flow from operations.
- GWW had positive earnings in each of the past 5 years.
- Each year in the past 5 years GWW had a positive operating cash flow.
1.2 Ratios
- With an excellent Return On Assets value of 19.55%, GWW belongs to the best of the industry, outperforming 98.00% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 48.58%, GWW belongs to the top of the industry, outperforming 94.00% of the companies in the same industry.
- GWW has a better Return On Invested Capital (27.94%) than 98.00% of its industry peers.
- GWW had an Average Return On Invested Capital over the past 3 years of 30.88%. This 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's Profit Margin of 9.75% is fine compared to the rest of the industry. GWW outperforms 78.00% of its industry peers.
- GWW's Profit Margin has improved in the last couple of years.
- 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.
- GWW's Operating Margin has improved in the last couple of years.
- 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so GWW is creating value.
- The number of shares outstanding for GWW has been reduced compared to 1 year ago.
- GWW has less shares outstanding than it did 5 years ago.
- GWW has a worse debt/assets ratio than last year.
2.2 Solvency
- GWW has an Altman-Z score of 11.38. This indicates that GWW is financially healthy and has little risk of bankruptcy at the moment.
- GWW's Altman-Z score of 11.38 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.
- A Debt/Equity ratio of 0.66 indicates that GWW is somewhat dependend on debt financing.
- The Debt to Equity ratio of GWW (0.66) is comparable to the rest of the 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 | 11.38 |
ROIC/WACC2.9
WACC9.65%
2.3 Liquidity
- A Current Ratio of 2.72 indicates that GWW has no problem at all paying its short term obligations.
- GWW has a Current ratio of 2.72. This is in the better half of the industry: GWW outperforms 72.00% of its industry peers.
- 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.
- The Earnings Per Share has been growing by 17.64% on average over the past years. This is quite good.
- Looking at the last year, GWW shows a small growth in Revenue. The Revenue has grown by 4.83% in the last year.
- The Revenue has been growing by 8.37% on average over the past years. This is quite good.
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
- 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.
- 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
- GWW is valuated quite expensively with a Price/Earnings ratio of 26.61.
- Compared to the rest of the industry, the Price/Earnings ratio of GWW is on the same level as its industry peers.
- GWW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.87.
- GWW is valuated rather expensively with a Price/Forward Earnings ratio of 23.86.
- GWW's Price/Forward Earnings is on the same level as the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 25.96. GWW is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.61 | ||
| Fwd PE | 23.86 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GWW is on the same level as its industry peers.
- GWW's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. GWW is cheaper than 62.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.82 | ||
| EV/EBITDA | 18.85 |
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)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.
- GWW's Dividend Yield is a higher than the industry average which is at 1.31.
- Compared to an average S&P500 Dividend Yield of 1.82, 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 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)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.