GRIFFON CORP (GFF) Stock Fundamental Analysis
NYSE:GFF - New York Stock Exchange, Inc. - US3984331021 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to GFF. GFF was compared to 41 industry peers in the Building Products industry. While GFF belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on GFF.
1. Profitability
1.1 Basic Checks
In the past year GFF was profitable.
In the past year GFF had a positive cash flow from operations.
Of the past 5 years GFF 4 years were profitable.
Each year in the past 5 years GFF had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 10.26%, GFF is doing good in the industry, outperforming 65.85% of the companies in the same industry.
Looking at the Return On Equity, with a value of 104.74%, GFF belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
GFF has a Return On Invested Capital of 16.15%. This is in the better half of the industry: GFF outperforms 73.17% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GFF is in line with the industry average of 13.18%.
The last Return On Invested Capital (16.15%) for GFF is above the 3 year average (13.01%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.26% | ||
| ROE | 104.74% | ||
| ROIC | 16.15% |
ROA(3y)1.75%
ROA(5y)2.1%
ROE(3y)25.95%
ROE(5y)19.05%
ROIC(3y)13.01%
ROIC(5y)10.16%
1.3 Margins
Looking at the Profit Margin, with a value of 9.13%, GFF is in line with its industry, outperforming 53.66% of the companies in the same industry.
GFF's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 17.43%, GFF is doing good in the industry, outperforming 68.29% of the companies in the same industry.
In the last couple of years the Operating Margin of GFF has grown nicely.
GFF's Gross Margin of 41.02% is fine compared to the rest of the industry. GFF outperforms 78.05% of its industry peers.
In the last couple of years the Gross Margin of GFF has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.43% | ||
| PM (TTM) | 9.13% | ||
| GM | 41.02% |
OM growth 3Y25.65%
OM growth 5Y23.71%
PM growth 3Y31.88%
PM growth 5Y32.08%
GM growth 3Y12.08%
GM growth 5Y7.85%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), GFF is creating some value.
The number of shares outstanding for GFF has been reduced compared to 1 year ago.
GFF has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, GFF has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.29 indicates that GFF is not in any danger for bankruptcy at the moment.
GFF has a Altman-Z score (3.29) which is in line with its industry peers.
The Debt to FCF ratio of GFF is 4.83, which is a neutral value as it means it would take GFF, 4.83 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.83, GFF is doing worse than 60.98% of the companies in the same industry.
GFF has a Debt/Equity ratio of 6.44. This is a high value indicating a heavy dependency on external financing.
GFF's Debt to Equity ratio of 6.44 is on the low side compared to the rest of the industry. GFF is outperformed by 92.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.44 | ||
| Debt/FCF | 4.83 | ||
| Altman-Z | 3.29 |
ROIC/WACC1.64
WACC9.84%
2.3 Liquidity
GFF has a Current Ratio of 2.51. This indicates that GFF is financially healthy and has no problem in meeting its short term obligations.
GFF has a better Current ratio (2.51) than 63.41% of its industry peers.
A Quick Ratio of 1.34 indicates that GFF should not have too much problems paying its short term obligations.
GFF has a Quick ratio of 1.34. This is comparable to the rest of the industry: GFF outperforms 53.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.51 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.50% over the past year.
GFF shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 36.56% yearly.
Looking at the last year, GFF shows a decrease in Revenue. The Revenue has decreased by -2.47% in the last year.
The Revenue has been growing slightly by 6.96% on average over the past years.
EPS 1Y (TTM)14.5%
EPS 3Y39.99%
EPS 5Y36.56%
EPS Q2Q%29.91%
Revenue 1Y (TTM)-2.47%
Revenue growth 3Y4.93%
Revenue growth 5Y6.96%
Sales Q2Q%-1.68%
3.2 Future
GFF is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.76% yearly.
The Revenue is expected to grow by 1.77% on average over the next years.
EPS Next Y11.72%
EPS Next 2Y14.29%
EPS Next 3Y15.76%
EPS Next 5YN/A
Revenue Next Year-0.15%
Revenue Next 2Y2.11%
Revenue Next 3Y1.77%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
GFF is valuated correctly with a Price/Earnings ratio of 12.67.
Based on the Price/Earnings ratio, GFF is valued a bit cheaper than the industry average as 73.17% of the companies are valued more expensively.
GFF's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.85.
The Price/Forward Earnings ratio is 10.31, which indicates a very decent valuation of GFF.
GFF's Price/Forward Earnings ratio is rather cheap when compared to the industry. GFF is cheaper than 82.93% of the companies in the same industry.
GFF is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.77, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.67 | ||
| Fwd PE | 10.31 |
4.2 Price Multiples
GFF's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. GFF is cheaper than 73.17% of the companies in the same industry.
80.49% of the companies in the same industry are more expensive than GFF, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.75 | ||
| EV/EBITDA | 8.82 |
4.3 Compensation for Growth
GFF's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of GFF may justify a higher PE ratio.
GFF's earnings are expected to grow with 15.76% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.08
PEG (5Y)0.35
EPS Next 2Y14.29%
EPS Next 3Y15.76%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.06%, GFF has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.24, GFF pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.45, GFF's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
5.2 History
The dividend of GFF is nicely growing with an annual growth rate of 18.06%!
GFF has been paying a dividend for at least 10 years, so it has a reliable track record.
GFF has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)18.06%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
14.62% of the earnings are spent on dividend by GFF. This is a low number and sustainable payout ratio.
GFF's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP14.62%
EPS Next 2Y14.29%
EPS Next 3Y15.76%
69.07
+0.96 (+1.41%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners80.39%
Inst Owner Change-0.18%
Ins Owners10.52%
Ins Owner Change-5.04%
Market Cap3.28B
Analysts88
Price Target100.11 (44.94%)
Short Float %5.2%
Short Ratio4.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
Yearly Dividend0.68
Dividend Growth(5Y)18.06%
DP14.62%
Div Incr Years12
Div Non Decr Years12
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)19.41%
Min EPS beat(2)15.26%
Max EPS beat(2)23.55%
EPS beat(4)3
Avg EPS beat(4)22.84%
Min EPS beat(4)-6.57%
Max EPS beat(4)59.12%
EPS beat(8)7
Avg EPS beat(8)34.71%
EPS beat(12)11
Avg EPS beat(12)54.27%
EPS beat(16)14
Avg EPS beat(16)55.48%
Revenue beat(2)1
Avg Revenue beat(2)-0.01%
Min Revenue beat(2)-1.87%
Max Revenue beat(2)1.86%
Revenue beat(4)2
Avg Revenue beat(4)-0.29%
Min Revenue beat(4)-6.9%
Max Revenue beat(4)5.75%
Revenue beat(8)3
Avg Revenue beat(8)-0.36%
Revenue beat(12)4
Avg Revenue beat(12)0.26%
Revenue beat(16)5
Avg Revenue beat(16)-3.42%
PT rev (1m)-3.15%
PT rev (3m)-2.83%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-5.17%
EPS NY rev (1m)0.25%
EPS NY rev (3m)2.54%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-3.81%
Revenue NY rev (1m)0.19%
Revenue NY rev (3m)-0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.67 | ||
| Fwd PE | 10.31 | ||
| P/S | 1.26 | ||
| P/FCF | 10.75 | ||
| P/OCF | 8.71 | ||
| P/B | 14.41 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.82 |
EPS(TTM)5.45
EY7.89%
EPS(NY)6.7
Fwd EY9.7%
FCF(TTM)6.42
FCFY9.3%
OCF(TTM)7.93
OCFY11.48%
SpS54.97
BVpS4.79
TBVpS-14.96
PEG (NY)1.08
PEG (5Y)0.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.26% | ||
| ROE | 104.74% | ||
| ROCE | 23.13% | ||
| ROIC | 16.15% | ||
| ROICexc | 17.5% | ||
| ROICexgc | 36.19% | ||
| OM | 17.43% | ||
| PM (TTM) | 9.13% | ||
| GM | 41.02% | ||
| FCFM | 11.69% |
ROA(3y)1.75%
ROA(5y)2.1%
ROE(3y)25.95%
ROE(5y)19.05%
ROIC(3y)13.01%
ROIC(5y)10.16%
ROICexc(3y)13.73%
ROICexc(5y)10.9%
ROICexgc(3y)27.02%
ROICexgc(5y)20.88%
ROCE(3y)18.64%
ROCE(5y)14.56%
ROICexcg growth 3Y35.8%
ROICexcg growth 5Y28.19%
ROICexc growth 3Y29.9%
ROICexc growth 5Y27.94%
OM growth 3Y25.65%
OM growth 5Y23.71%
PM growth 3Y31.88%
PM growth 5Y32.08%
GM growth 3Y12.08%
GM growth 5Y7.85%
F-Score8
Asset Turnover1.12
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.44 | ||
| Debt/FCF | 4.83 | ||
| Debt/EBITDA | 2.84 | ||
| Cap/Depr | 116.31% | ||
| Cap/Sales | 2.74% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 72.9% | ||
| Profit Quality | 127.99% | ||
| Current Ratio | 2.51 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 3.29 |
F-Score8
WACC9.84%
ROIC/WACC1.64
Cap/Depr(3y)91.87%
Cap/Depr(5y)85.09%
Cap/Sales(3y)2.16%
Cap/Sales(5y)2.02%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)14.5%
EPS 3Y39.99%
EPS 5Y36.56%
EPS Q2Q%29.91%
EPS Next Y11.72%
EPS Next 2Y14.29%
EPS Next 3Y15.76%
EPS Next 5YN/A
Revenue 1Y (TTM)-2.47%
Revenue growth 3Y4.93%
Revenue growth 5Y6.96%
Sales Q2Q%-1.68%
Revenue Next Year-0.15%
Revenue Next 2Y2.11%
Revenue Next 3Y1.77%
Revenue Next 5YN/A
EBIT growth 1Y10.08%
EBIT growth 3Y31.85%
EBIT growth 5Y32.32%
EBIT Next Year28.53%
EBIT Next 3Y15.12%
EBIT Next 5YN/A
FCF growth 1Y66.49%
FCF growth 3Y60.43%
FCF growth 5Y32.06%
OCF growth 1Y71.31%
OCF growth 3Y49.99%
OCF growth 5Y27.54%