WW GRAINGER INC (GWW) Stock Fundamental Analysis
USA - NYSE:GWW - US3848021040 - Common Stock
957.99 USD
-1.75 (-0.18%)
957.99 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to GWW. GWW was compared to 49 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. While showing a medium growth rate, GWW is valued expensive at the moment. This makes GWW very considerable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year GWW was profitable.
GWW had a positive operating cash flow in the past year.
GWW had positive earnings in each of the past 5 years.
In the past 5 years GWW always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 21.51%, GWW belongs to the best of the industry, outperforming 97.96% of the companies in the same industry.
The Return On Equity of GWW (52.31%) is better than 91.84% of its industry peers.
GWW has a Return On Invested Capital of 29.46%. This is amongst the best in the industry. GWW outperforms 97.96% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GWW is significantly above the industry average of 10.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.51% | ||
| ROE | 52.31% | ||
| ROIC | 29.46% |
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 10.99%, GWW is in the better half of the industry, outperforming 79.59% of the companies in the same industry.
GWW's Profit Margin has improved in the last couple of years.
GWW has a Operating Margin of 15.27%. This is in the better half of the industry: GWW outperforms 75.51% of its industry peers.
GWW's Operating Margin has improved in the last couple of years.
GWW's Gross Margin of 39.25% is fine compared to the rest of the industry. GWW outperforms 75.51% of its industry peers.
GWW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.27% | ||
| PM (TTM) | 10.99% | ||
| GM | 39.25% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), GWW is creating value.
The number of shares outstanding for GWW has been reduced compared to 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
GWW has an Altman-Z score of 10.92. This indicates that GWW is financially healthy and has little risk of bankruptcy at the moment.
GWW's Altman-Z score of 10.92 is amongst the best of the industry. GWW outperforms 97.96% of its industry peers.
The Debt to FCF ratio of GWW is 1.65, which is an excellent value as it means it would take GWW, only 1.65 years of fcf income to pay off all of its debts.
GWW has a better Debt to FCF ratio (1.65) than 83.67% of its industry peers.
A Debt/Equity ratio of 0.64 indicates that GWW is somewhat dependend on debt financing.
GWW has a Debt to Equity ratio (0.64) which is in line with 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 | 0.64 | ||
| Debt/FCF | 1.65 | ||
| Altman-Z | 10.92 |
ROIC/WACC3.15
WACC9.35%
2.3 Liquidity
GWW has a Current Ratio of 2.82. This indicates that GWW is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of GWW (2.82) is better than 73.47% of its industry peers.
A Quick Ratio of 1.64 indicates that GWW should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.64, GWW is doing good in the industry, outperforming 69.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.11% over the past year.
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.
GWW shows a small growth in Revenue. In the last year, the Revenue has grown by 4.35%.
The Revenue has been growing by 8.37% on average over the past years. This is quite good.
EPS 1Y (TTM)6.11%
EPS 3Y25.23%
EPS 5Y17.64%
EPS Q2Q%2.15%
Revenue 1Y (TTM)4.35%
Revenue growth 3Y9.65%
Revenue growth 5Y8.37%
Sales Q2Q%5.61%
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 9.78% on average per year.
The Revenue is expected to grow by 7.02% on average over the next years.
EPS Next Y2.39%
EPS Next 2Y6.93%
EPS Next 3Y8.03%
EPS Next 5Y9.78%
Revenue Next Year4.9%
Revenue Next 2Y5.66%
Revenue Next 3Y5.99%
Revenue Next 5Y7.02%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
GWW is valuated rather expensively with a Price/Earnings ratio of 24.31.
GWW's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.53, GWW is valued at the same level.
With a Price/Forward Earnings ratio of 21.51, GWW is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GWW is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.04, GWW is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.31 | ||
| Fwd PE | 21.51 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as GWW.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GWW indicates a somewhat cheap valuation: GWW is cheaper than 61.22% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.36 | ||
| EV/EBITDA | 16.32 |
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)10.16
PEG (5Y)1.38
EPS Next 2Y6.93%
EPS Next 3Y8.03%
5. Dividend
5.1 Amount
GWW has a yearly dividend return of 0.93%, which is pretty low.
GWW's Dividend Yield is a higher than the industry average which is at 2.84.
With a Dividend Yield of 0.93, GWW pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
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 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
22.89% of the earnings are spent on dividend by GWW. This is a low number and sustainable payout ratio.
GWW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP22.89%
EPS Next 2Y6.93%
EPS Next 3Y8.03%
957.99
-1.75 (-0.18%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners74.36%
Inst Owner Change0.05%
Ins Owners6.11%
Ins Owner Change-0.1%
Market Cap45.82B
Analysts66.67
Price Target1048.22 (9.42%)
Short Float %2.32%
Short Ratio3.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
Yearly Dividend8.62
Dividend Growth(5Y)7.57%
DP22.89%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.49%
Min EPS beat(2)-1.9%
Max EPS beat(2)2.89%
EPS beat(4)1
Avg EPS beat(4)-0.59%
Min EPS beat(4)-1.99%
Max EPS beat(4)2.89%
EPS beat(8)4
Avg EPS beat(8)0.56%
EPS beat(12)8
Avg EPS beat(12)2.56%
EPS beat(16)12
Avg EPS beat(16)3.78%
Revenue beat(2)0
Avg Revenue beat(2)-0.83%
Min Revenue beat(2)-1.24%
Max Revenue beat(2)-0.42%
Revenue beat(4)0
Avg Revenue beat(4)-1.04%
Min Revenue beat(4)-1.28%
Max Revenue beat(4)-0.42%
Revenue beat(8)0
Avg Revenue beat(8)-1.34%
Revenue beat(12)1
Avg Revenue beat(12)-1.04%
Revenue beat(16)5
Avg Revenue beat(16)-0.25%
PT rev (1m)0%
PT rev (3m)-4.89%
EPS NQ rev (1m)-0.1%
EPS NQ rev (3m)-5.57%
EPS NY rev (1m)0.02%
EPS NY rev (3m)-2.43%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.51%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.31 | ||
| Fwd PE | 21.51 | ||
| P/S | 2.62 | ||
| P/FCF | 32.36 | ||
| P/OCF | 22.22 | ||
| P/B | 12.47 | ||
| P/tB | 15.06 | ||
| EV/EBITDA | 16.32 |
EPS(TTM)39.41
EY4.11%
EPS(NY)44.55
Fwd EY4.65%
FCF(TTM)29.6
FCFY3.09%
OCF(TTM)43.11
OCFY4.5%
SpS365.48
BVpS76.81
TBVpS63.6
PEG (NY)10.16
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.51% | ||
| ROE | 52.31% | ||
| ROCE | 38.49% | ||
| ROIC | 29.46% | ||
| ROICexc | 32.23% | ||
| ROICexgc | 35.81% | ||
| OM | 15.27% | ||
| PM (TTM) | 10.99% | ||
| GM | 39.25% | ||
| FCFM | 8.1% |
ROA(3y)21.49%
ROA(5y)18.26%
ROE(3y)59.66%
ROE(5y)54.53%
ROIC(3y)30.88%
ROIC(5y)27.39%
ROICexc(3y)34.68%
ROICexc(5y)30.48%
ROICexgc(3y)38.97%
ROICexgc(5y)34.58%
ROCE(3y)40.34%
ROCE(5y)35.78%
ROICexcg growth 3Y13.79%
ROICexcg growth 5Y5.15%
ROICexc growth 3Y14.65%
ROICexc growth 5Y6.97%
OM growth 3Y9.16%
OM growth 5Y5.04%
PM growth 3Y11.56%
PM growth 5Y8.51%
GM growth 3Y2.79%
GM growth 5Y0.56%
F-Score5
Asset Turnover1.96
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 1.65 | ||
| Debt/EBITDA | 0.8 | ||
| Cap/Depr | 262.6% | ||
| Cap/Sales | 3.7% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.74% | ||
| Profit Quality | 73.67% | ||
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.64 | ||
| Altman-Z | 10.92 |
F-Score5
WACC9.35%
ROIC/WACC3.15
Cap/Depr(3y)184.73%
Cap/Depr(5y)160.05%
Cap/Sales(3y)2.51%
Cap/Sales(5y)2.23%
Profit Quality(3y)79.52%
Profit Quality(5y)87.44%
High Growth Momentum
Growth
EPS 1Y (TTM)6.11%
EPS 3Y25.23%
EPS 5Y17.64%
EPS Q2Q%2.15%
EPS Next Y2.39%
EPS Next 2Y6.93%
EPS Next 3Y8.03%
EPS Next 5Y9.78%
Revenue 1Y (TTM)4.35%
Revenue growth 3Y9.65%
Revenue growth 5Y8.37%
Sales Q2Q%5.61%
Revenue Next Year4.9%
Revenue Next 2Y5.66%
Revenue Next 3Y5.99%
Revenue Next 5Y7.02%
EBIT growth 1Y3.29%
EBIT growth 3Y19.7%
EBIT growth 5Y13.83%
EBIT Next Year11.06%
EBIT Next 3Y9.38%
EBIT Next 5Y8.84%
FCF growth 1Y4.27%
FCF growth 3Y32.04%
FCF growth 5Y13.84%
OCF growth 1Y25.43%
OCF growth 3Y31.09%
OCF growth 5Y15.17%