FERGUSON ENTERPRISES INC (FERG) Stock Fundamental Analysis
NYSE:FERG - New York Stock Exchange, Inc. - US31488V1070 - Common Stock - Currency: USD
Overall FERG gets a fundamental rating of 5 out of 10. We evaluated FERG against 48 industry peers in the Trading Companies & Distributors industry. While FERG has a great profitability rating, there are some minor concerns on its financial health. FERG is valied quite expensively at the moment, while 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.
In the past 5 years FERG has always been profitable.
Each year in the past 5 years FERG had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.31%, FERG belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
FERG has a better Return On Equity (29.05%) than 87.50% of its industry peers.
The Return On Invested Capital of FERG (16.68%) is better than 91.67% of its industry peers.
FERG had an Average Return On Invested Capital over the past 3 years of 19.52%. This is significantly above the industry average of 9.62%.
| 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
The Profit Margin of FERG (5.32%) is better than 70.83% of its industry peers.
FERG's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 8.48%, FERG is in line with its industry, outperforming 58.33% 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 47.92% of the companies in the same industry.
In the last couple of years the Gross Margin of FERG has remained more or less at the same level.
| 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
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.
The number of shares outstanding for FERG has been reduced compared to 5 years ago.
The debt/assets ratio for FERG is higher compared to a year ago.
2.2 Solvency
FERG has an Altman-Z score of 5.26. This indicates that FERG is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.26, FERG belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
FERG has a debt to FCF ratio of 2.95. This is a good value and a sign of high solvency as FERG would need 2.95 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.95, FERG is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
FERG has a Debt/Equity ratio of 0.67. This is a neutral value indicating FERG is somewhat dependend on debt financing.
FERG's Debt to Equity ratio of 0.67 is in line compared to the rest of the industry. FERG outperforms 47.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 2.95 | ||
| Altman-Z | 5.26 |
ROIC/WACC1.64
WACC10.15%
2.3 Liquidity
A Current Ratio of 1.64 indicates that FERG should not have too much problems paying its short term obligations.
FERG has a worse Current ratio (1.64) than 62.50% 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 72.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.64 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
FERG shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.32%.
FERG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.56% yearly.
Looking at the last year, FERG shows a small growth in Revenue. The Revenue has grown by 2.32% in the last year.
The Revenue has been growing slightly by 6.13% on average over the past years.
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
FERG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.20% yearly.
FERG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.54% yearly.
EPS Next Y-0.57%
EPS Next 2Y5.22%
EPS Next 3Y7.29%
EPS Next 5Y8.2%
Revenue Next Year3.19%
Revenue Next 2Y4.42%
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 23.58.
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 (27.54), we can say FERG is valued inline with the index average.
FERG is valuated rather expensively with a Price/Forward Earnings ratio of 20.77.
The rest of the industry has a similar Price/Forward Earnings ratio as FERG.
When comparing the Price/Forward Earnings ratio of FERG to the average of the S&P500 Index (36.44), we can say FERG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.58 | ||
| Fwd PE | 20.77 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FERG is valued a bit more expensive than the industry average as 60.42% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of FERG is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.63 | ||
| EV/EBITDA | 16.24 |
4.3 Compensation for Growth
The excellent 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 1.52%, FERG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.91, FERG pays a bit more dividend than its industry peers.
FERG's Dividend Yield is slightly below the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.52% |
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.
FERG has decreased its dividend 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%
222.79
+3.95 (+1.8%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners95.61%
Inst Owner Change-0.2%
Ins Owners2.47%
Ins Owner Change0.01%
Market Cap43.93B
Analysts78
Price Target236.6 (6.2%)
Short Float %1.26%
Short Ratio1.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.52% |
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)19.46%
PT rev (3m)19.12%
EPS NQ rev (1m)0.63%
EPS NQ rev (3m)6.16%
EPS NY rev (1m)0.13%
EPS NY rev (3m)6.32%
Revenue NQ rev (1m)0.56%
Revenue NQ rev (3m)3.01%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.58 | ||
| Fwd PE | 20.77 | ||
| P/S | 1.45 | ||
| P/FCF | 31.63 | ||
| P/OCF | 25.35 | ||
| P/B | 7.94 | ||
| P/tB | 18.66 | ||
| EV/EBITDA | 16.24 |
EPS(TTM)9.45
EY4.24%
EPS(NY)10.73
Fwd EY4.82%
FCF(TTM)7.04
FCFY3.16%
OCF(TTM)8.79
OCFY3.94%
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
WACC10.15%
ROIC/WACC1.64
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 Year3.19%
Revenue Next 2Y4.42%
Revenue Next 3Y4.99%
Revenue Next 5Y7.54%
EBIT growth 1Y-2.25%
EBIT growth 3Y10.79%
EBIT growth 5Y12.13%
EBIT Next Year0.89%
EBIT Next 3Y6.74%
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%