GRAHAM HOLDINGS CO-CLASS B (GHC) Stock Fundamental Analysis
NYSE:GHC - New York Stock Exchange, Inc. - US3846371041 - Common Stock - Currency: USD
Overall GHC gets a fundamental rating of 6 out of 10. We evaluated GHC against 72 industry peers in the Diversified Consumer Services industry. While GHC belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. GHC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
GHC had positive earnings in the past year.
GHC had a positive operating cash flow in the past year.
GHC had positive earnings in each of the past 5 years.
In the past 5 years GHC always reported a positive cash flow from operatings.
1.2 Ratios
GHC's Return On Assets of 9.76% is amongst the best of the industry. GHC outperforms 84.72% of its industry peers.
GHC's Return On Equity of 17.31% is amongst the best of the industry. GHC outperforms 84.72% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.50%, GHC is in the better half of the industry, outperforming 63.89% of the companies in the same industry.
GHC had an Average Return On Invested Capital over the past 3 years of 2.58%. This is significantly below the industry average of 11.31%.
The 3 year average ROIC (2.58%) for GHC is below the current ROIC(3.50%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.76% | ||
| ROE | 17.31% | ||
| ROIC | 3.5% |
ROA(3y)4.41%
ROA(5y)4.52%
ROE(3y)7.94%
ROE(5y)7.94%
ROIC(3y)2.58%
ROIC(5y)2.13%
1.3 Margins
Looking at the Profit Margin, with a value of 12.48%, GHC belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
In the last couple of years the Profit Margin of GHC has grown nicely.
GHC's Operating Margin of 5.25% is fine compared to the rest of the industry. GHC outperforms 63.89% of its industry peers.
In the last couple of years the Operating Margin of GHC has remained more or less at the same level.
GHC has a Gross Margin of 30.43%. This is in the lower half of the industry: GHC underperforms 61.11% of its industry peers.
GHC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.25% | ||
| PM (TTM) | 12.48% | ||
| GM | 30.43% |
OM growth 3Y16.95%
OM growth 5Y1.11%
PM growth 3Y11.02%
PM growth 5Y6.2%
GM growth 3Y-3.09%
GM growth 5Y-0.25%
2. Health
2.1 Basic Checks
GHC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
GHC has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, GHC has less shares outstanding
GHC has a worse debt/assets ratio than last year.
2.2 Solvency
GHC has an Altman-Z score of 3.25. This indicates that GHC is financially healthy and has little risk of bankruptcy at the moment.
GHC's Altman-Z score of 3.25 is fine compared to the rest of the industry. GHC outperforms 77.78% of its industry peers.
The Debt to FCF ratio of GHC is 2.34, which is a good value as it means it would take GHC, 2.34 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of GHC (2.34) is better than 75.00% of its industry peers.
GHC has a Debt/Equity ratio of 0.17. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.17, GHC perfoms like the industry average, outperforming 55.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 3.25 |
ROIC/WACC0.41
WACC8.43%
2.3 Liquidity
A Current Ratio of 1.62 indicates that GHC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.62, GHC is in the better half of the industry, outperforming 63.89% of the companies in the same industry.
GHC has a Quick Ratio of 1.41. This is a normal value and indicates that GHC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.41, GHC is in the better half of the industry, outperforming 61.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.41 |
3. Growth
3.1 Past
GHC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.72%, which is quite impressive.
GHC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.67% yearly.
GHC shows a small growth in Revenue. In the last year, the Revenue has grown by 6.99%.
GHC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.32% yearly.
EPS 1Y (TTM)40.72%
EPS 3Y22.67%
EPS 5Y13.67%
EPS Q2Q%3.56%
Revenue 1Y (TTM)6.99%
Revenue growth 3Y14.57%
Revenue growth 5Y10.32%
Sales Q2Q%1.15%
3.2 Future
Based on estimates for the next years, GHC will show a decrease in Earnings Per Share. The EPS will decrease by -0.13% on average per year.
GHC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.83% yearly.
EPS Next Y-20.81%
EPS Next 2Y3.32%
EPS Next 3Y-0.13%
EPS Next 5YN/A
Revenue Next Year-0.93%
Revenue Next 2Y2.67%
Revenue Next 3Y3.83%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 14.48 indicates a correct valuation of GHC.
Compared to the rest of the industry, the Price/Earnings ratio of GHC indicates a rather cheap valuation: GHC is cheaper than 84.72% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.17. GHC is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 13.65, which indicates a correct valuation of GHC.
Based on the Price/Forward Earnings ratio, GHC is valued a bit cheaper than the industry average as 77.78% of the companies are valued more expensively.
GHC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.10.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.48 | ||
| Fwd PE | 13.65 |
4.2 Price Multiples
83.33% of the companies in the same industry are more expensive than GHC, based on the Enterprise Value to EBITDA ratio.
GHC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GHC is cheaper than 88.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.81 | ||
| EV/EBITDA | 6.17 |
4.3 Compensation for Growth
GHC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.06
EPS Next 2Y3.32%
EPS Next 3Y-0.13%
5. Dividend
5.1 Amount
With a yearly dividend of 0.77%, GHC is not a good candidate for dividend investing.
GHC's Dividend Yield is rather good when compared to the industry average which is at 4.26. GHC pays more dividend than 83.33% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, GHC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.77% |
5.2 History
The dividend of GHC has a limited annual growth rate of 4.28%.
GHC has paid a dividend for at least 10 years, which is a reliable track record.
As GHC did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)4.28%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
4.10% of the earnings are spent on dividend by GHC. This is a low number and sustainable payout ratio.
DP4.1%
EPS Next 2Y3.32%
EPS Next 3Y-0.13%
929.28
-4.85 (-0.52%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners81.22%
Inst Owner Change1.8%
Ins Owners6.74%
Ins Owner Change0.42%
Market Cap4.05B
Analysts42.5
Price Target800.7 (-13.84%)
Short Float %1.71%
Short Ratio2.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.77% |
Yearly Dividend6.89
Dividend Growth(5Y)4.28%
DP4.1%
Div Incr Years8
Div Non Decr Years8
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.57%
Min EPS beat(2)1.07%
Max EPS beat(2)2.08%
EPS beat(4)4
Avg EPS beat(4)14.64%
Min EPS beat(4)1.07%
Max EPS beat(4)43.87%
EPS beat(8)7
Avg EPS beat(8)16.47%
EPS beat(12)9
Avg EPS beat(12)12.96%
EPS beat(16)11
Avg EPS beat(16)8.84%
Revenue beat(2)0
Avg Revenue beat(2)-3.24%
Min Revenue beat(2)-3.72%
Max Revenue beat(2)-2.75%
Revenue beat(4)1
Avg Revenue beat(4)-2.17%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.53%
Revenue beat(8)3
Avg Revenue beat(8)-0.73%
Revenue beat(12)6
Avg Revenue beat(12)0.35%
Revenue beat(16)9
Avg Revenue beat(16)6.87%
PT rev (1m)2.61%
PT rev (3m)2.61%
EPS NQ rev (1m)-21.21%
EPS NQ rev (3m)-21.21%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-3.65%
Revenue NQ rev (3m)-3.65%
Revenue NY rev (1m)-2.53%
Revenue NY rev (3m)-2.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.48 | ||
| Fwd PE | 13.65 | ||
| P/S | 0.68 | ||
| P/FCF | 10.81 | ||
| P/OCF | 8.97 | ||
| P/B | 0.94 | ||
| P/tB | 1.58 | ||
| EV/EBITDA | 6.17 |
EPS(TTM)64.17
EY6.91%
EPS(NY)68.07
Fwd EY7.33%
FCF(TTM)85.96
FCFY9.25%
OCF(TTM)103.66
OCFY11.15%
SpS1366.24
BVpS984.96
TBVpS590
PEG (NY)N/A
PEG (5Y)1.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.76% | ||
| ROE | 17.31% | ||
| ROCE | 4.91% | ||
| ROIC | 3.5% | ||
| ROICexc | 4.2% | ||
| ROICexgc | 6.22% | ||
| OM | 5.25% | ||
| PM (TTM) | 12.48% | ||
| GM | 30.43% | ||
| FCFM | 6.29% |
ROA(3y)4.41%
ROA(5y)4.52%
ROE(3y)7.94%
ROE(5y)7.94%
ROIC(3y)2.58%
ROIC(5y)2.13%
ROICexc(3y)3.05%
ROICexc(5y)2.54%
ROICexgc(3y)4.81%
ROICexgc(5y)4.06%
ROCE(3y)3.62%
ROCE(5y)3%
ROICexcg growth 3Y29.13%
ROICexcg growth 5Y2.01%
ROICexc growth 3Y33.45%
ROICexc growth 5Y5.67%
OM growth 3Y16.95%
OM growth 5Y1.11%
PM growth 3Y11.02%
PM growth 5Y6.2%
GM growth 3Y-3.09%
GM growth 5Y-0.25%
F-Score8
Asset Turnover0.78
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 2.34 | ||
| Debt/EBITDA | 1.51 | ||
| Cap/Depr | 45.62% | ||
| Cap/Sales | 1.29% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 93.78% | ||
| Profit Quality | 50.41% | ||
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.41 | ||
| Altman-Z | 3.25 |
F-Score8
WACC8.43%
ROIC/WACC0.41
Cap/Depr(3y)39.68%
Cap/Depr(5y)52.48%
Cap/Sales(3y)1.98%
Cap/Sales(5y)2.69%
Profit Quality(3y)118.63%
Profit Quality(5y)82.91%
High Growth Momentum
Growth
EPS 1Y (TTM)40.72%
EPS 3Y22.67%
EPS 5Y13.67%
EPS Q2Q%3.56%
EPS Next Y-20.81%
EPS Next 2Y3.32%
EPS Next 3Y-0.13%
EPS Next 5YN/A
Revenue 1Y (TTM)6.99%
Revenue growth 3Y14.57%
Revenue growth 5Y10.32%
Sales Q2Q%1.15%
Revenue Next Year-0.93%
Revenue Next 2Y2.67%
Revenue Next 3Y3.83%
Revenue Next 5YN/A
EBIT growth 1Y53.41%
EBIT growth 3Y33.98%
EBIT growth 5Y11.54%
EBIT Next Year14.01%
EBIT Next 3Y10.33%
EBIT Next 5YN/A
FCF growth 1Y205.98%
FCF growth 3Y101.03%
FCF growth 5Y35.22%
OCF growth 1Y111.66%
OCF growth 3Y26.21%
OCF growth 5Y19.76%