WW GRAINGER INC (GWW) Stock Fundamental Analysis
USA - NYSE:GWW - US3848021040 - Common Stock
993.64 USD
-18.98 (-1.87%)
993.64 USD
0 (0%)
Overall GWW gets a fundamental rating of 7 out of 10. We evaluated GWW against 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. GWW is quite expensive at the moment. It does show a decent growth rate. These ratings would make GWW suitable for quality investing!
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.
In the past 5 years GWW always reported a positive cash flow from operatings.
1.2 Ratios
GWW's Return On Assets of 21.51% is amongst the best of the industry. GWW outperforms 98.00% of its industry peers.
The Return On Equity of GWW (52.31%) is better than 92.00% of its industry peers.
With an excellent Return On Invested Capital value of 29.46%, GWW belongs to the best of the industry, outperforming 98.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GWW is significantly above the industry average of 10.24%.
| 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
GWW's Profit Margin of 10.99% is fine compared to the rest of the industry. GWW outperforms 80.00% of its industry peers.
In the last couple of years the Profit Margin of GWW has grown nicely.
GWW has a better Operating Margin (15.27%) than 76.00% of its industry peers.
In the last couple of years the Operating Margin of GWW has grown nicely.
GWW's Gross Margin of 39.25% is fine compared to the rest of the industry. GWW outperforms 76.00% of its industry peers.
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 | 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.
Compared to 1 year ago, GWW has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 11.11 indicates that GWW is not in any danger for bankruptcy at the moment.
GWW has a Altman-Z score of 11.11. This is amongst the best in the industry. GWW outperforms 98.00% of its industry peers.
GWW has a debt to FCF ratio of 1.65. This is a very positive value and a sign of high solvency as it would only need 1.65 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.65, GWW is doing good in the industry, outperforming 80.00% of the companies in the same industry.
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 comparable to the rest of the industry.
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 | 0.64 | ||
| Debt/FCF | 1.65 | ||
| Altman-Z | 11.11 |
ROIC/WACC3.12
WACC9.44%
2.3 Liquidity
A Current Ratio of 2.82 indicates that GWW has no problem at all paying its short term obligations.
GWW has a better Current ratio (2.82) than 72.00% of its industry peers.
GWW has a Quick Ratio of 1.64. This is a normal value and indicates that GWW is financially healthy and should not expect problems in meeting its short term obligations.
GWW's Quick ratio of 1.64 is fine compared to the rest of the industry. GWW outperforms 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
GWW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.11%.
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.
The Revenue has been growing slightly by 4.35% in the past year.
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
The Earnings Per Share is expected to grow by 9.78% on average over the next years. This is quite good.
Based on estimates for the next years, GWW will show a small growth in Revenue. The Revenue will grow by 7.02% on average per year.
EPS Next Y2.38%
EPS Next 2Y6.94%
EPS Next 3Y8.03%
EPS Next 5Y9.78%
Revenue Next Year4.89%
Revenue Next 2Y5.65%
Revenue Next 3Y5.97%
Revenue Next 5Y7.02%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 25.21, GWW can be considered very expensive at the moment.
GWW's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of GWW to the average of the S&P500 Index (27.20), we can say GWW is valued inline with the index average.
A Price/Forward Earnings ratio of 22.30 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 22.71, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.21 | ||
| Fwd PE | 22.3 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as GWW.
GWW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.56 | ||
| EV/EBITDA | 16.9 |
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)10.61
PEG (5Y)1.43
EPS Next 2Y6.94%
EPS Next 3Y8.03%
5. Dividend
5.1 Amount
With a yearly dividend of 0.89%, GWW is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.74, GWW pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.38, GWW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
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 2Y6.94%
EPS Next 3Y8.03%
993.64
-18.98 (-1.87%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners74.04%
Inst Owner Change-0.74%
Ins Owners6.08%
Ins Owner Change0.56%
Market Cap47.53B
Analysts66.67
Price Target1048.22 (5.49%)
Short Float %1.89%
Short Ratio2.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
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)-0.49%
PT rev (3m)-4.5%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)-5.57%
EPS NY rev (1m)-2.45%
EPS NY rev (3m)-2.42%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.51%
Revenue NY rev (1m)0.51%
Revenue NY rev (3m)0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.21 | ||
| Fwd PE | 22.3 | ||
| P/S | 2.72 | ||
| P/FCF | 33.56 | ||
| P/OCF | 23.05 | ||
| P/B | 12.94 | ||
| P/tB | 15.62 | ||
| EV/EBITDA | 16.9 |
EPS(TTM)39.41
EY3.97%
EPS(NY)44.55
Fwd EY4.48%
FCF(TTM)29.6
FCFY2.98%
OCF(TTM)43.11
OCFY4.34%
SpS365.48
BVpS76.81
TBVpS63.6
PEG (NY)10.61
PEG (5Y)1.43
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 | 11.11 |
F-Score5
WACC9.44%
ROIC/WACC3.12
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 Y2.38%
EPS Next 2Y6.94%
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 Year4.89%
Revenue Next 2Y5.65%
Revenue Next 3Y5.97%
Revenue Next 5Y7.02%
EBIT growth 1Y3.29%
EBIT growth 3Y19.7%
EBIT growth 5Y13.83%
EBIT Next Year11.69%
EBIT Next 3Y9.58%
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%