FERGUSON PLC (FERG)

JE00BJVNSS43 - Common Stock

218.43  -0.52 (-0.24%)

After market: 218.43 0 (0%)

Fundamental Rating

5

FERG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 51 industry peers in the Trading Companies & Distributors industry. FERG has an excellent profitability rating, but there are some minor concerns on its financial health. FERG has a expensive valuation and it also scores bad on growth.



7

1. Profitability

1.1 Basic Checks

FERG had positive earnings in the past year.
FERG had a positive operating cash flow in the past year.
Each year in the past 5 years FERG has been profitable.
In the past 5 years FERG always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of FERG (11.04%) is better than 80.00% of its industry peers.
FERG has a better Return On Equity (33.82%) than 84.00% of its industry peers.
The Return On Invested Capital of FERG (19.07%) is better than 86.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for FERG is significantly above the industry average of 11.86%.
Industry RankSector Rank
ROA 11.04%
ROE 33.82%
ROIC 19.07%
ROA(3y)12.03%
ROA(5y)10.59%
ROE(3y)37.47%
ROE(5y)31.97%
ROIC(3y)20.05%
ROIC(5y)17.57%

1.3 Margins

FERG has a Profit Margin (6.14%) which is comparable to the rest of the industry.
FERG's Profit Margin has been stable in the last couple of years.
With a Operating Margin value of 9.12%, FERG perfoms like the industry average, outperforming 54.00% of the companies in the same industry.
In the last couple of years the Operating Margin of FERG has grown nicely.
FERG has a Gross Margin (30.28%) which is comparable to the rest of the industry.
FERG's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 9.12%
PM (TTM) 6.14%
GM 30.28%
OM growth 3Y12.45%
OM growth 5Y7.08%
PM growth 3Y9.65%
PM growth 5Y0.8%
GM growth 3Y0.38%
GM growth 5Y0.77%

5

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), FERG is creating value.
The number of shares outstanding for FERG has been reduced compared to 1 year ago.
FERG has less shares outstanding than it did 5 years ago.
FERG has a better debt/assets ratio than last year.

2.2 Solvency

The Debt to FCF ratio of FERG is 1.56, which is an excellent value as it means it would take FERG, only 1.56 years of fcf income to pay off all of its debts.
FERG has a Debt to FCF ratio of 1.56. This is in the better half of the industry: FERG outperforms 76.00% of its industry peers.
A Debt/Equity ratio of 0.68 indicates that FERG is somewhat dependend on debt financing.
The Debt to Equity ratio of FERG (0.68) is comparable to the rest of the industry.
Although FERG 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 RankSector Rank
Debt/Equity 0.68
Debt/FCF 1.56
Altman-Z N/A
ROIC/WACC2.35
WACC8.11%

2.3 Liquidity

A Current Ratio of 1.71 indicates that FERG should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.71, FERG is in line with its industry, outperforming 44.00% of the companies in the same industry.
FERG has a Quick Ratio of 1.71. This is a bad value and indicates that FERG is not financially healthy enough and could expect problems in meeting its short term obligations.
FERG has a worse Quick ratio (0.97) than 62.00% of its industry peers.
Industry RankSector Rank
Current Ratio 1.71
Quick Ratio 0.97

3

3. Growth

3.1 Past

The earnings per share for FERG have decreased strongly by -12.10% in the last year.
The Earnings Per Share has been growing by 17.21% on average over the past years. This is quite good.
FERG shows a decrease in Revenue. In the last year, the revenue decreased by -0.62%.
FERG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.46% yearly.
EPS 1Y (TTM)-12.1%
EPS 3Y24.69%
EPS 5Y17.21%
EPS growth Q2Q-10.17%
Revenue 1Y (TTM)-0.62%
Revenue growth 3Y14.25%
Revenue growth 5Y7.46%
Revenue growth Q2Q-2.81%

3.2 Future

Based on estimates for the next years, FERG will show a small growth in Earnings Per Share. The EPS will grow by 5.66% on average per year.
FERG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.19% yearly.
EPS Next Y0.44%
EPS Next 2Y5.49%
EPS Next 3Y7.58%
EPS Next 5Y5.66%
Revenue Next Year1.15%
Revenue Next 2Y3.18%
Revenue Next 3Y4.53%
Revenue Next 5Y6.19%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

3

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 22.92, which indicates a rather expensive current valuation of FERG.
Compared to the rest of the industry, the Price/Earnings ratio of FERG is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.48. FERG is around the same levels.
Based on the Price/Forward Earnings ratio of 19.97, the valuation of FERG can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FERG is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.79, FERG is valued at the same level.
Industry RankSector Rank
PE 22.92
Fwd PE 19.97

4.2 Price Multiples

64.00% of the companies in the same industry are cheaper than FERG, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, FERG is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 18.88
EV/EBITDA 15.71

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of FERG may justify a higher PE ratio.
PEG (NY)52.1
PEG (5Y)1.33
EPS Next 2Y5.49%
EPS Next 3Y7.58%

3

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.43%, FERG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.90, FERG pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.34, FERG is paying slightly less dividend.
Industry RankSector Rank
Dividend Yield 1.43%

5.2 History

The dividend of FERG decreases each year by -9.86%.
FERG has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)-9.86%
Div Incr Years0
Div Non Decr Years0

5.3 Sustainability

47.60% of the earnings are spent on dividend by FERG. This is a bit on the high side, but may be sustainable.
DP47.6%
EPS Next 2Y5.49%
EPS Next 3Y7.58%

FERGUSON PLC

NYSE:FERG (3/28/2024, 7:11:02 PM)

After market: 218.43 0 (0%)

218.43

-0.52 (-0.24%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap44.28B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.43%
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 RankSector Rank
PE 22.92
Fwd PE 19.97
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)52.1
PEG (5Y)1.33
Profitability
Industry RankSector Rank
ROA 11.04%
ROE 33.82%
ROCE
ROIC
ROICexc
ROICexgc
OM 9.12%
PM (TTM) 6.14%
GM 30.28%
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 Turnover1.8
Health
Industry RankSector Rank
Debt/Equity 0.68
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.71
Quick Ratio 0.97
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)
Growth
EPS 1Y (TTM)-12.1%
EPS 3Y24.69%
EPS 5Y
EPS growth Q2Q
EPS Next Y0.44%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-0.62%
Revenue growth 3Y14.25%
Revenue growth 5Y
Revenue growth 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