GRACO INC (GGG)
US3841091040 - Common Stock
We assign a fundamental rating of 7 out of 10 to GGG. GGG was compared to 132 industry peers in the Machinery industry. GGG gets an excellent profitability rating and is at the same time showing great financial health properties. GGG is quite expensive at the moment. It does show a decent growth rate. This makes GGG very considerable for quality investing!
1. Profitability
1.1 Basic Checks
GGG had positive earnings in the past year.
In the past year GGG had a positive cash flow from operations.
GGG had positive earnings in each of the past 5 years.
Each year in the past 5 years GGG had a positive operating cash flow.
1.2 Ratios
GGG has a Return On Assets of 17.93%. This is amongst the best in the industry. GGG outperforms 96.92% of its industry peers.
GGG has a Return On Equity of 21.39%. This is amongst the best in the industry. GGG outperforms 83.85% of its industry peers.
Looking at the Return On Invested Capital, with a value of 21.07%, GGG belongs to the top of the industry, outperforming 96.15% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GGG is significantly above the industry average of 10.72%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.93% | ||
| ROE | 21.39% | ||
| ROIC | 21.07% |
ROA(3y)18.5%
ROA(5y)18.49%
ROE(3y)24.43%
ROE(5y)26.51%
ROIC(3y)22.61%
ROIC(5y)22.67%
1.3 Margins
Looking at the Profit Margin, with a value of 23.15%, GGG belongs to the top of the industry, outperforming 99.23% of the companies in the same industry.
In the last couple of years the Profit Margin of GGG has grown nicely.
With an excellent Operating Margin value of 29.24%, GGG belongs to the best of the industry, outperforming 99.23% of the companies in the same industry.
GGG's Operating Margin has improved in the last couple of years.
GGG has a better Gross Margin (52.92%) than 95.38% of its industry peers.
In the last couple of years the Gross Margin of GGG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.24% | ||
| PM (TTM) | 23.15% | ||
| GM | 52.92% |
OM growth 3Y4.84%
OM growth 5Y2.47%
PM growth 3Y4.82%
PM growth 5Y2.26%
GM growth 3Y0.68%
GM growth 5Y-0.19%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so GGG is creating value.
The number of shares outstanding for GGG remains at a similar level compared to 1 year ago.
Compared to 5 years ago, GGG has more shares outstanding
Compared to 1 year ago, GGG has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 20.81 indicates that GGG is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 20.81, GGG belongs to the top of the industry, outperforming 98.46% of the companies in the same industry.
The Debt to FCF ratio of GGG is 0.06, which is an excellent value as it means it would take GGG, only 0.06 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.06, GGG belongs to the top of the industry, outperforming 93.85% of the companies in the same industry.
A Debt/Equity ratio of 0.01 indicates that GGG is not too dependend on debt financing.
GGG has a better Debt to Equity ratio (0.01) than 83.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 20.81 |
ROIC/WACC2.29
WACC9.2%
2.3 Liquidity
A Current Ratio of 4.11 indicates that GGG has no problem at all paying its short term obligations.
The Current ratio of GGG (4.11) is better than 86.92% of its industry peers.
A Quick Ratio of 2.80 indicates that GGG has no problem at all paying its short term obligations.
GGG has a better Quick ratio (2.80) than 86.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.11 | ||
| Quick Ratio | 2.8 |
3. Growth
3.1 Past
GGG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.34%.
Measured over the past years, GGG shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.04% on average per year.
Looking at the last year, GGG shows a decrease in Revenue. The Revenue has decreased by -0.94% in the last year.
The Revenue has been growing slightly by 5.84% on average over the past years.
EPS 1Y (TTM)5.34%
EPS 3Y16.08%
EPS 5Y10.04%
EPS Q2Q%-12.16%
Revenue 1Y (TTM)-0.94%
Revenue growth 3Y9.99%
Revenue growth 5Y5.84%
Sales Q2Q%-7.07%
3.2 Future
The Earnings Per Share is expected to grow by 9.02% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.96% on average over the next years. This is quite good.
EPS Next Y1.84%
EPS Next 2Y4.21%
EPS Next 3Y5.8%
EPS Next 5Y9.02%
Revenue Next Year0.86%
Revenue Next 2Y2.78%
Revenue Next 3Y3.8%
Revenue Next 5Y8.96%
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 stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
GGG is valuated quite expensively with a Price/Earnings ratio of 27.28.
GGG's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.05, GGG is valued at the same level.
GGG is valuated rather expensively with a Price/Forward Earnings ratio of 24.38.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GGG indicates a slightly more expensive valuation: GGG is more expensive than 60.77% of the companies listed in the same industry.
GGG's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 20.07.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.28 | ||
| Fwd PE | 24.38 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GGG is valued a bit more expensive than the industry average as 62.31% of the companies are valued more cheaply.
GGG's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.57 | ||
| EV/EBITDA | 18.44 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
GGG has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)14.83
PEG (5Y)2.72
EPS Next 2Y4.21%
EPS Next 3Y5.8%
5. Dividend
5.1 Amount
GGG has a Yearly Dividend Yield of 1.29%.
GGG's Dividend Yield is a higher than the industry average which is at 1.70.
With a Dividend Yield of 1.29, GGG pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
5.2 History
The dividend of GGG is nicely growing with an annual growth rate of 12.19%!
GGG has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)12.19%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
32.38% of the earnings are spent on dividend by GGG. This is a low number and sustainable payout ratio.
The dividend of GGG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP32.38%
EPS Next 2Y4.21%
EPS Next 3Y5.8%
GRACO INC
NYSE:GGG (5/31/2024, 7:04:00 PM)
After market: 80.75 0 (0%)80.75
+1.67 (+2.11%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap13.66B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.28 | ||
| Fwd PE | 24.38 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)14.83
PEG (5Y)2.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.93% | ||
| ROE | 21.39% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 29.24% | ||
| PM (TTM) | 23.15% | ||
| GM | 52.92% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 4.11 | ||
| Quick Ratio | 2.8 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)5.34%
EPS 3Y16.08%
EPS 5Y
EPS Q2Q%
EPS Next Y1.84%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-0.94%
Revenue growth 3Y9.99%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y