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Is FERGUSON PLC (NYSE:FERG) suited for quality investing?

By Mill Chart

Last update: May 14, 2024

Quality investors are looking for the best of the best. Companies which are growing steadily and consistently, but are also in excellent financial condition. We will have a look here to see if FERGUSON PLC (NYSE:FERG) is suited for quality investing. Investors should of course do their own research, but we spotted FERGUSON PLC showing up in our Caviar Cruise quality screen, so it may be worth spending some more time on it.

A Deep Dive into FERGUSON PLC's Quality Metrics.

  • Over the past 5 years, FERGUSON PLC has experienced impressive revenue growth, with 7.46% increase. This demonstrates the company's ability to effectively expand its top line and suggests a positive outlook for future revenue generation.
  • FERGUSON PLC demonstrates impressive performance in terms of ROIC excluding cash and goodwill, with a 26.28% ratio. This highlights the company's efficient utilization of capital and its focus on maximizing returns for investors.
  • With a Debt/Free Cash Flow Ratio of 1.56, FERGUSON PLC exhibits solid financial health and responsible debt management practices. This ratio indicates the company's ability to generate ample free cash flow to meet its debt obligations and pursue growth opportunities.
  • With a favorable Profit Quality (5-year) ratio of 89.76%, FERGUSON PLC showcases its ability to consistently deliver high-quality profits. This metric signifies the company's financial strength and its capacity to generate sustainable earnings over an extended period.
  • FERGUSON PLC has demonstrated consistent growth in EBIT over the past 5 years, with a strong 15.07%. This signifies the company's ability to generate sustainable earnings and reflects its positive financial trajectory.
  • FERGUSON PLC has achieved superior EBIT 5-year growth compared to its Revenue 5-year growth. This demonstrates the company's ability to maximize its profitability through effective cost management and operational strategies.

Fundamental Analysis Observations

Every day ChartMill assigns a Fundamental Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple fundamental indicators and properties.

Overall FERG gets a fundamental rating of 5 out of 10. We evaluated FERG against 51 industry peers in the Trading Companies & Distributors industry. While FERG belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. FERG is valued expensive and it does not seem to be growing.

Our latest full fundamental report of FERG contains the most current fundamental analsysis.

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.