GRAHAM HOLDINGS CO-CLASS B (GHC) Stock Fundamental Analysis
NYSE:GHC - New York Stock Exchange, Inc. - US3846371041 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to GHC. GHC was compared to 72 industry peers in the Diversified Consumer Services industry. GHC scores excellent on profitability, but there are some minor concerns on its financial health. GHC has a decent growth rate and is not valued too expensively.
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
The Return On Assets of GHC (9.76%) is better than 84.72% of its industry peers.
With an excellent Return On Equity value of 17.31%, GHC belongs to the best of the industry, outperforming 84.72% of the companies in the same industry.
GHC has a Return On Invested Capital of 3.50%. This is in the better half of the industry: GHC outperforms 63.89% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GHC is significantly below the industry average of 11.25%.
The last Return On Invested Capital (3.50%) for GHC is above the 3 year average (2.58%), which is a sign of increasing profitability.
| 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
GHC has a better Profit Margin (12.48%) than 83.33% of its industry peers.
GHC's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 5.25%, GHC is doing good in the industry, outperforming 63.89% of the companies in the same industry.
GHC's Operating Margin has been stable in the last couple of years.
GHC's Gross Margin of 30.43% is on the low side compared to the rest of the industry. GHC is outperformed by 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
The debt/assets ratio for GHC is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.26 indicates that GHC is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.26, GHC is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 2.34, GHC is in the better half of the industry, outperforming 76.39% of the companies in the same industry.
A Debt/Equity ratio of 0.17 indicates that GHC is not too dependend on debt financing.
GHC has a Debt to Equity ratio (0.17) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 3.26 |
ROIC/WACC0.41
WACC8.44%
2.3 Liquidity
GHC has a Current Ratio of 1.62. 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 better Current ratio (1.62) than 63.89% of its industry peers.
A Quick Ratio of 1.41 indicates that GHC should not have too much problems paying 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%.
The Revenue has been growing by 10.32% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to decrease by -0.13% on average over the next years.
Based on estimates for the next years, GHC will show a small growth in Revenue. The Revenue will grow by 3.83% on average per year.
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
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
GHC is valuated correctly with a Price/Earnings ratio of 14.87.
84.72% of the companies in the same industry are more expensive than GHC, based on the Price/Earnings ratio.
GHC is valuated rather cheaply when we compare the Price/Earnings ratio to 26.25, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 14.02, the valuation of GHC can be described as correct.
GHC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GHC is cheaper than 77.78% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.15, GHC is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.87 | ||
| Fwd PE | 14.02 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GHC is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, GHC is valued cheaper than 88.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.1 | ||
| EV/EBITDA | 6.26 |
4.3 Compensation for Growth
The decent profitability rating of GHC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.09
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.
With a Dividend Yield of 0.77, GHC pays less dividend than the S&P500 average, which is at 2.40.
| 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 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
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%
954.41
+10.73 (+1.14%)
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 Cap4.16B
Analysts42.5
Price Target800.7 (-16.11%)
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 | 14.87 | ||
| Fwd PE | 14.02 | ||
| P/S | 0.7 | ||
| P/FCF | 11.1 | ||
| P/OCF | 9.21 | ||
| P/B | 0.97 | ||
| P/tB | 1.62 | ||
| EV/EBITDA | 6.26 |
EPS(TTM)64.17
EY6.72%
EPS(NY)68.07
Fwd EY7.13%
FCF(TTM)85.96
FCFY9.01%
OCF(TTM)103.66
OCFY10.86%
SpS1366.24
BVpS984.96
TBVpS590
PEG (NY)N/A
PEG (5Y)1.09
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 | 3.26 |
F-Score8
WACC8.44%
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%