FERGUSON ENTERPRISES INC (FERG) Stock Fundamental Analysis
NYSE:FERG - New York Stock Exchange, Inc. - US31488V1070 - Common Stock - Currency: USD
FERG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 50 industry peers in the Trading Companies & Distributors industry. FERG scores excellent on profitability, but there are some minor concerns on its financial health. FERG is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
FERG had positive earnings in the past year.
In the past year FERG had a positive cash flow from operations.
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 (9.31%) is better than 76.00% of its industry peers.
Looking at the Return On Equity, with a value of 29.05%, FERG belongs to the top of the industry, outperforming 88.00% of the companies in the same industry.
With an excellent Return On Invested Capital value of 16.68%, FERG belongs to the best of the industry, outperforming 94.00% of the companies in the same industry.
FERG had an Average Return On Invested Capital over the past 3 years of 19.52%. This is significantly above the industry average of 9.94%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.31% | ||
| ROE | 29.05% | ||
| ROIC | 16.68% |
ROA(3y)11.94%
ROA(5y)10.74%
ROE(3y)37.96%
ROE(5y)33.06%
ROIC(3y)19.52%
ROIC(5y)17.16%
1.3 Margins
FERG's Profit Margin of 5.32% is fine compared to the rest of the industry. FERG outperforms 64.00% of its industry peers.
In the last couple of years the Profit Margin of FERG has grown nicely.
Looking at the Operating Margin, with a value of 8.48%, FERG is in line with its industry, outperforming 58.00% of the companies in the same industry.
In the last couple of years the Operating Margin of FERG has grown nicely.
Looking at the Gross Margin, with a value of 30.46%, FERG is in line with its industry, outperforming 50.00% of the companies in the same industry.
FERG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.48% | ||
| PM (TTM) | 5.32% | ||
| GM | 30.46% |
OM growth 3Y1.51%
OM growth 5Y5.66%
PM growth 3Y-3.22%
PM growth 5Y3.07%
GM growth 3Y-0.08%
GM growth 5Y0.8%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so FERG is creating value.
The number of shares outstanding for FERG has been reduced compared to 1 year ago.
The number of shares outstanding for FERG has been reduced compared to 5 years ago.
Compared to 1 year ago, FERG has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.26 indicates that FERG is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.26, FERG belongs to the best of the industry, outperforming 82.00% of the companies in the same industry.
The Debt to FCF ratio of FERG is 2.95, which is a good value as it means it would take FERG, 2.95 years of fcf income to pay off all of its debts.
FERG's Debt to FCF ratio of 2.95 is fine compared to the rest of the industry. FERG outperforms 68.00% of its industry peers.
FERG has a Debt/Equity ratio of 0.67. This is a neutral value indicating FERG is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.67, FERG is in line with its industry, outperforming 48.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 2.95 | ||
| Altman-Z | 5.26 |
ROIC/WACC1.69
WACC9.88%
2.3 Liquidity
FERG has a Current Ratio of 1.64. This is a normal value and indicates that FERG is financially healthy and should not expect problems in meeting its short term obligations.
FERG has a Current ratio of 1.64. This is in the lower half of the industry: FERG underperforms 62.00% of its industry peers.
A Quick Ratio of 0.88 indicates that FERG may have some problems paying its short term obligations.
FERG's Quick ratio of 0.88 is on the low side compared to the rest of the industry. FERG is outperformed by 72.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.64 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
The earnings per share for FERG have decreased by -0.32% in the last year.
The Earnings Per Share has been growing by 14.56% on average over the past years. This is quite good.
FERG shows a small growth in Revenue. In the last year, the Revenue has grown by 2.32%.
FERG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.13% yearly.
EPS 1Y (TTM)-0.32%
EPS 3Y12.31%
EPS 5Y14.56%
EPS Q2Q%7.76%
Revenue 1Y (TTM)2.32%
Revenue growth 3Y9.15%
Revenue growth 5Y6.13%
Sales Q2Q%4.28%
3.2 Future
Based on estimates for the next years, FERG will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.20% on average per year.
The Revenue is expected to grow by 7.54% on average over the next years.
EPS Next Y-0.57%
EPS Next 2Y5.22%
EPS Next 3Y7.29%
EPS Next 5Y8.2%
Revenue Next Year3.21%
Revenue Next 2Y4.38%
Revenue Next 3Y4.99%
Revenue Next 5Y7.54%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
FERG is valuated rather expensively with a Price/Earnings ratio of 23.56.
The rest of the industry has a similar Price/Earnings ratio as FERG.
When comparing the Price/Earnings ratio of FERG to the average of the S&P500 Index (26.41), we can say FERG is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 20.75, the valuation of FERG can be described as rather expensive.
FERG's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 33.87. FERG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.56 | ||
| Fwd PE | 20.75 |
4.2 Price Multiples
FERG's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. FERG is more expensive than 60.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, FERG is valued a bit cheaper than the industry average as 62.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.6 | ||
| EV/EBITDA | 16.29 |
4.3 Compensation for Growth
The decent profitability rating of FERG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.62
EPS Next 2Y5.22%
EPS Next 3Y7.29%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.48%, FERG has a reasonable but not impressive dividend return.
FERG's Dividend Yield is a higher than the industry average which is at 2.04.
Compared to the average S&P500 Dividend Yield of 2.39, FERG is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.48% |
5.2 History
On average, the dividend of FERG grows each year by 14.94%, which is quite nice.
FERG has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of FERG decreased recently.
Dividend Growth(5Y)14.94%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
40.01% of the earnings are spent on dividend by FERG. This is a bit on the high side, but may be sustainable.
The dividend of FERG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP40.01%
EPS Next 2Y5.22%
EPS Next 3Y7.29%
222.62
-0.93 (-0.42%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners95.98%
Inst Owner Change0.01%
Ins Owners2.47%
Ins Owner Change0.01%
Market Cap43.90B
Analysts78.67
Price Target240.93 (8.22%)
Short Float %1.01%
Short Ratio1.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.48% |
Yearly Dividend3.87
Dividend Growth(5Y)14.94%
DP40.01%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)7.23%
Min EPS beat(2)-6.84%
Max EPS beat(2)21.31%
EPS beat(4)2
Avg EPS beat(4)2.1%
Min EPS beat(4)-8.26%
Max EPS beat(4)21.31%
EPS beat(8)3
Avg EPS beat(8)1.01%
EPS beat(12)5
Avg EPS beat(12)0.4%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)0.17%
Min Revenue beat(2)-0.33%
Max Revenue beat(2)0.67%
Revenue beat(4)1
Avg Revenue beat(4)-1.26%
Min Revenue beat(4)-2.7%
Max Revenue beat(4)0.67%
Revenue beat(8)2
Avg Revenue beat(8)-1.37%
Revenue beat(12)3
Avg Revenue beat(12)-1.22%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)3.43%
PT rev (3m)21.65%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)6.05%
EPS NY rev (1m)0%
EPS NY rev (3m)6.32%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)3.11%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.56 | ||
| Fwd PE | 20.75 | ||
| P/S | 1.45 | ||
| P/FCF | 31.6 | ||
| P/OCF | 25.33 | ||
| P/B | 7.94 | ||
| P/tB | 18.65 | ||
| EV/EBITDA | 16.29 |
EPS(TTM)9.45
EY4.24%
EPS(NY)10.73
Fwd EY4.82%
FCF(TTM)7.04
FCFY3.16%
OCF(TTM)8.79
OCFY3.95%
SpS153.22
BVpS28.05
TBVpS11.94
PEG (NY)N/A
PEG (5Y)1.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.31% | ||
| ROE | 29.05% | ||
| ROCE | 22.68% | ||
| ROIC | 16.68% | ||
| ROICexc | 17.49% | ||
| ROICexgc | 24.8% | ||
| OM | 8.48% | ||
| PM (TTM) | 5.32% | ||
| GM | 30.46% | ||
| FCFM | 4.6% |
ROA(3y)11.94%
ROA(5y)10.74%
ROE(3y)37.96%
ROE(5y)33.06%
ROIC(3y)19.52%
ROIC(5y)17.16%
ROICexc(3y)20.83%
ROICexc(5y)19.21%
ROICexgc(3y)29.84%
ROICexgc(5y)27.75%
ROCE(3y)26.54%
ROCE(5y)23.43%
ROICexcg growth 3Y-2.31%
ROICexcg growth 5Y-1.42%
ROICexc growth 3Y-1.25%
ROICexc growth 5Y0.09%
OM growth 3Y1.51%
OM growth 5Y5.66%
PM growth 3Y-3.22%
PM growth 5Y3.07%
GM growth 3Y-0.08%
GM growth 5Y0.8%
F-Score4
Asset Turnover1.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 2.95 | ||
| Debt/EBITDA | 1.27 | ||
| Cap/Depr | 94.77% | ||
| Cap/Sales | 1.14% | ||
| Interest Coverage | 13.01 | ||
| Cash Conversion | 59.25% | ||
| Profit Quality | 86.43% | ||
| Current Ratio | 1.64 | ||
| Quick Ratio | 0.88 | ||
| Altman-Z | 5.26 |
F-Score4
WACC9.88%
ROIC/WACC1.69
Cap/Depr(3y)114.92%
Cap/Depr(5y)105.2%
Cap/Sales(3y)1.25%
Cap/Sales(5y)1.25%
Profit Quality(3y)82.6%
Profit Quality(5y)91.33%
High Growth Momentum
Growth
EPS 1Y (TTM)-0.32%
EPS 3Y12.31%
EPS 5Y14.56%
EPS Q2Q%7.76%
EPS Next Y-0.57%
EPS Next 2Y5.22%
EPS Next 3Y7.29%
EPS Next 5Y8.2%
Revenue 1Y (TTM)2.32%
Revenue growth 3Y9.15%
Revenue growth 5Y6.13%
Sales Q2Q%4.28%
Revenue Next Year3.21%
Revenue Next 2Y4.38%
Revenue Next 3Y4.99%
Revenue Next 5Y7.54%
EBIT growth 1Y-2.25%
EBIT growth 3Y10.79%
EBIT growth 5Y12.13%
EBIT Next Year6.2%
EBIT Next 3Y8.08%
EBIT Next 5Y8.15%
FCF growth 1Y-23.43%
FCF growth 3Y9.57%
FCF growth 5Y11.47%
OCF growth 1Y-23.66%
OCF growth 3Y10.66%
OCF growth 5Y7.74%