GRAHAM HOLDINGS CO-CLASS B (GHC) Stock Fundamental Analysis
NYSE:GHC - New York Stock Exchange, Inc. - US3846371041 - Common Stock - Currency: USD
GHC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 71 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
GHC had positive earnings in the past year.
In the past year GHC had a positive cash flow from operations.
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 has a Return On Assets of 8.89%. This is amongst the best in the industry. GHC outperforms 80.28% of its industry peers.
With a decent Return On Equity value of 15.56%, GHC is doing good in the industry, outperforming 77.46% of the companies in the same industry.
GHC's Return On Invested Capital of 3.51% is fine compared to the rest of the industry. GHC outperforms 61.97% of its industry peers.
GHC had an Average Return On Invested Capital over the past 3 years of 2.58%. This is significantly below the industry average of 10.20%.
The last Return On Invested Capital (3.51%) for GHC is above the 3 year average (2.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.89% | ||
| ROE | 15.56% | ||
| ROIC | 3.51% |
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
With an excellent Profit Margin value of 14.01%, GHC belongs to the best of the industry, outperforming 84.51% of the companies in the same industry.
GHC's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 6.16%, GHC is in the better half of the industry, outperforming 60.56% of the companies in the same industry.
GHC's Operating Margin has been stable in the last couple of years.
With a Gross Margin value of 31.09%, GHC is not doing good in the industry: 63.38% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of GHC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.16% | ||
| PM (TTM) | 14.01% | ||
| GM | 31.09% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GHC is destroying value.
GHC has less shares outstanding than it did 1 year ago.
GHC has less shares outstanding than it did 5 years ago.
The debt/assets ratio for GHC is higher compared to a year ago.
2.2 Solvency
GHC has an Altman-Z score of 3.16. This indicates that GHC is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of GHC (3.16) is better than 71.83% of its industry peers.
The Debt to FCF ratio of GHC is 1.98, which is an excellent value as it means it would take GHC, only 1.98 years of fcf income to pay off all of its debts.
GHC has a better Debt to FCF ratio (1.98) than 78.87% of its industry peers.
A Debt/Equity ratio of 0.08 indicates that GHC is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.08, GHC is in the better half of the industry, outperforming 64.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 1.98 | ||
| Altman-Z | 3.16 |
ROIC/WACC0.42
WACC8.4%
2.3 Liquidity
A Current Ratio of 1.27 indicates that GHC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.27, GHC perfoms like the industry average, outperforming 52.11% of the companies in the same industry.
GHC has a Quick Ratio of 1.10. This is a normal value and indicates that GHC is financially healthy and should not expect problems in meeting its short term obligations.
GHC has a Quick ratio (1.10) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 45.16% over the past year.
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 very negative growth in Revenue. In the last year, the Revenue has decreased by -16.20%.
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)45.16%
EPS 3Y22.67%
EPS 5Y13.67%
EPS Q2Q%12.83%
Revenue 1Y (TTM)-16.2%
Revenue growth 3Y14.57%
Revenue growth 5Y10.32%
Sales Q2Q%2.57%
3.2 Future
Based on estimates for the next years, GHC will show a decrease in Earnings Per Share. The EPS will decrease by -1.28% on average per year.
Based on estimates for the next years, GHC will show a small growth in Revenue. The Revenue will grow by 2.87% on average per year.
EPS Next Y-26.99%
EPS Next 2Y1.23%
EPS Next 3Y-1.28%
EPS Next 5YN/A
Revenue Next Year-0.93%
Revenue Next 2Y2.67%
Revenue Next 3Y2.87%
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.
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
With a Price/Earnings ratio of 16.17, GHC is valued correctly.
GHC's Price/Earnings ratio is a bit cheaper when compared to the industry. GHC is cheaper than 74.65% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.93, GHC is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 16.28, the valuation of GHC can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GHC indicates a somewhat cheap valuation: GHC is cheaper than 73.24% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.31. GHC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.17 | ||
| Fwd PE | 16.28 |
4.2 Price Multiples
GHC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GHC is cheaper than 84.51% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GHC is valued cheaper than 88.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.07 | ||
| EV/EBITDA | 6.61 |
4.3 Compensation for Growth
The decent profitability rating of GHC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.18
EPS Next 2Y1.23%
EPS Next 3Y-1.28%
5. Dividend
5.1 Amount
With a yearly dividend of 0.75%, GHC is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.62, GHC pays a better dividend. On top of this GHC pays more dividend than 84.51% of the companies listed in the same industry.
With a Dividend Yield of 0.75, GHC pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
5.2 History
The dividend of GHC has a limited annual growth rate of 4.28%.
GHC has been paying a dividend for at least 10 years, so it has a reliable track record.
GHC has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)4.28%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
GHC pays out 4.53% of its income as dividend. This is a sustainable payout ratio.
DP4.53%
EPS Next 2Y1.23%
EPS Next 3Y-1.28%
1063.97
+2.27 (+0.21%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners81.78%
Inst Owner Change0.04%
Ins Owners6.6%
Ins Owner Change0.03%
Market Cap4.64B
Analysts42.5
Price Target800.7 (-24.74%)
Short Float %2.51%
Short Ratio1.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
Yearly Dividend6.89
Dividend Growth(5Y)4.28%
DP4.53%
Div Incr Years8
Div Non Decr Years8
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)20.93%
Min EPS beat(2)2.08%
Max EPS beat(2)39.78%
EPS beat(4)4
Avg EPS beat(4)13.62%
Min EPS beat(4)1.07%
Max EPS beat(4)39.78%
EPS beat(8)7
Avg EPS beat(8)17.5%
EPS beat(12)9
Avg EPS beat(12)14.81%
EPS beat(16)12
Avg EPS beat(16)11.96%
Revenue beat(2)1
Avg Revenue beat(2)-0.65%
Min Revenue beat(2)-3.72%
Max Revenue beat(2)2.42%
Revenue beat(4)1
Avg Revenue beat(4)-1.69%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)2.42%
Revenue beat(8)3
Avg Revenue beat(8)-1.01%
Revenue beat(12)7
Avg Revenue beat(12)0.65%
Revenue beat(16)9
Avg Revenue beat(16)0.67%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.13%
EPS NY rev (1m)0%
EPS NY rev (3m)-7.8%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.6%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.17 | ||
| Fwd PE | 16.28 | ||
| P/S | 0.96 | ||
| P/FCF | 11.07 | ||
| P/OCF | 9.38 | ||
| P/B | 1.07 | ||
| P/tB | 1.78 | ||
| EV/EBITDA | 6.61 |
EPS(TTM)65.8
EY6.18%
EPS(NY)65.35
Fwd EY6.14%
FCF(TTM)96.11
FCFY9.03%
OCF(TTM)113.46
OCFY10.66%
SpS1108.86
BVpS998.14
TBVpS599.3
PEG (NY)N/A
PEG (5Y)1.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.89% | ||
| ROE | 15.56% | ||
| ROCE | 4.93% | ||
| ROIC | 3.51% | ||
| ROICexc | 4.27% | ||
| ROICexgc | 6.57% | ||
| OM | 6.16% | ||
| PM (TTM) | 14.01% | ||
| GM | 31.09% | ||
| FCFM | 8.67% |
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-Score6
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 1.98 | ||
| Debt/EBITDA | 0.62 | ||
| Cap/Depr | 32.97% | ||
| Cap/Sales | 1.56% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 93.81% | ||
| Profit Quality | 61.86% | ||
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 3.16 |
F-Score6
WACC8.4%
ROIC/WACC0.42
Cap/Depr(3y)30.32%
Cap/Depr(5y)46.86%
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)45.16%
EPS 3Y22.67%
EPS 5Y13.67%
EPS Q2Q%12.83%
EPS Next Y-26.99%
EPS Next 2Y1.23%
EPS Next 3Y-1.28%
EPS Next 5YN/A
Revenue 1Y (TTM)-16.2%
Revenue growth 3Y14.57%
Revenue growth 5Y10.32%
Sales Q2Q%2.57%
Revenue Next Year-0.93%
Revenue Next 2Y2.67%
Revenue Next 3Y2.87%
Revenue Next 5YN/A
EBIT growth 1Y45.26%
EBIT growth 3Y33.98%
EBIT growth 5Y11.54%
EBIT Next Year14.01%
EBIT Next 3Y10.27%
EBIT Next 5YN/A
FCF growth 1Y291.65%
FCF growth 3Y101.03%
FCF growth 5Y35.22%
OCF growth 1Y149.3%
OCF growth 3Y26.21%
OCF growth 5Y19.76%