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W.W. Grainger Inc (NYSE:GWW) – A Quality Stock with Strong Fundamentals

By Mill Chart

Last update: Jun 4, 2025

W.W. Grainger Inc (NYSE:GWW) stands out as a potential candidate for quality investors, meeting key criteria for financial strength, profitability, and sustainable growth. The company, a leading distributor of maintenance, repair, and operating (MRO) products, has demonstrated consistent performance across multiple metrics.

W.W. Grainger stock chart

Why GWW Fits the Quality Investing Profile

  • High Return on Invested Capital (ROIC) – GWW’s ROIC (excluding cash and goodwill) is 37.86%, well above the 15% threshold for quality stocks. This indicates efficient use of capital to generate profits.
  • Strong EBIT Growth – The company’s 5-year EBIT growth rate is 13.83%, outpacing its revenue growth of 6.01%, a sign of improving operational efficiency.
  • Healthy Debt Management – With a Debt-to-Free Cash Flow ratio of 1.47, GWW could repay its debt in under two years using current cash flows, reflecting financial stability.
  • Profit Quality – Over the past five years, GWW has converted 87.44% of net income into free cash flow, indicating reliable earnings.
  • Analyst Confidence – Revenue is expected to grow at 6.01% annually over the next three years, reinforcing the company’s growth trajectory.

Fundamental Strengths

GWW scores well in profitability (8/10) and financial health (8/10), with high margins and strong returns on equity (54.89%) and assets (22.06%). While its valuation appears elevated (P/E of 27.76), this is partly justified by its robust fundamentals.

For investors seeking quality stocks, GWW presents a compelling case.

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Disclaimer

This is not investing advice. Always conduct your own research before making investment decisions.

WW GRAINGER INC

NYSE:GWW (6/4/2025, 8:04:00 PM)

After market: 1075.96 0 (0%)

1075.96

-12.08 (-1.11%)



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ChartMill News Image21 hours ago - ChartmillW.W. Grainger Inc (NYSE:GWW) – A Quality Stock with Strong Fundamentals

W.W. Grainger (NYSE:GWW) meets key quality investing criteria with strong ROIC, EBIT growth, and solid cash flow conversion, making it a candidate for long-term investors.

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