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. While GHC has a great profitability rating, 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.
GHC had a positive operating cash flow in the past year.
GHC had positive earnings in each of the past 5 years.
GHC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GHC has a Return On Assets of 9.76%. This is amongst the best in the industry. GHC outperforms 84.72% of its industry peers.
Looking at the Return On Equity, with a value of 17.31%, GHC belongs to the top 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 11.31%.
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
GHC has a better Profit Margin (12.48%) than 83.33% of its industry peers.
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.
With a Gross Margin value of 30.43%, GHC is not doing good in the industry: 61.11% 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 | 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.
Compared to 1 year ago, GHC has less shares outstanding
Compared to 5 years ago, GHC has less shares outstanding
Compared to 1 year ago, GHC has a worse debt to assets ratio.
2.2 Solvency
GHC has an Altman-Z score of 3.24. This indicates that GHC is financially healthy and has little risk of bankruptcy at the moment.
GHC has a Altman-Z score of 3.24. This is in the better half 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.
With a decent Debt to FCF ratio value of 2.34, GHC is doing good in the industry, outperforming 75.00% 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 | 3.24 |
ROIC/WACC0.41
WACC8.5%
2.3 Liquidity
A Current Ratio of 1.62 indicates that GHC should not have too much problems paying its short term obligations.
GHC has a Current ratio of 1.62. This is in the better half of the industry: GHC outperforms 63.89% of its industry peers.
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.
GHC's Quick ratio of 1.41 is fine compared to the rest of the industry. GHC outperforms 61.11% of its industry peers.
| 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.
The Earnings Per Share has been growing by 13.67% on average over the past years. This is quite good.
The Revenue has been growing slightly by 6.99% in the past year.
Measured over the past years, GHC shows a quite strong growth in Revenue. The Revenue has been growing by 10.32% on average per year.
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
GHC is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.13% yearly.
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.
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
The Price/Earnings ratio is 14.56, which 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.
GHC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.35.
With a Price/Forward Earnings ratio of 13.72, GHC is valued correctly.
Based on the Price/Forward Earnings ratio, GHC is valued a bit cheaper than 79.17% of the companies in the same industry.
GHC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.20, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.56 | ||
| Fwd PE | 13.72 |
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 | 10.87 | ||
| EV/EBITDA | 6.06 |
4.3 Compensation for Growth
The decent profitability rating of GHC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.07
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
GHC pays out 4.10% of its income as dividend. This is a sustainable payout ratio.
DP4.1%
EPS Next 2Y3.32%
EPS Next 3Y-0.13%
934.13
+12.71 (+1.38%)
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 Cap4.07B
Analysts42.5
Price Target800.7 (-14.28%)
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 | 14.56 | ||
| Fwd PE | 13.72 | ||
| P/S | 0.68 | ||
| P/FCF | 10.87 | ||
| P/OCF | 9.01 | ||
| P/B | 0.95 | ||
| P/tB | 1.58 | ||
| EV/EBITDA | 6.06 |
EPS(TTM)64.17
EY6.87%
EPS(NY)68.07
Fwd EY7.29%
FCF(TTM)85.96
FCFY9.2%
OCF(TTM)103.66
OCFY11.1%
SpS1366.24
BVpS984.96
TBVpS590
PEG (NY)N/A
PEG (5Y)1.07
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 | 3.24 |
F-Score8
WACC8.5%
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%