WW GRAINGER INC (GWW) Stock Fundamental Analysis
USA - NYSE:GWW - US3848021040 - Common Stock
1012.62 USD
+8.56 (+0.85%)
1012.62 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to GWW. GWW was compared to 50 industry peers in the Trading Companies & Distributors industry. Both the health and profitability get an excellent rating, making GWW a very profitable company, without any liquidiy or solvency issues. While showing a medium growth rate, GWW is valued expensive at the moment. These ratings would make GWW suitable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year GWW was profitable.
In the past year GWW had a positive cash flow from operations.
In the past 5 years GWW has always been profitable.
GWW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GWW's Return On Assets of 21.51% is amongst the best of the industry. GWW outperforms 98.00% of its industry peers.
GWW's Return On Equity of 52.31% is amongst the best of the industry. GWW outperforms 92.00% of its industry peers.
With an excellent Return On Invested Capital value of 29.46%, GWW belongs to the best of the industry, outperforming 98.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GWW is significantly above the industry average of 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.51% | ||
| ROE | 52.31% | ||
| ROIC | 29.46% |
ROA(3y)21.49%
ROA(5y)18.26%
ROE(3y)59.66%
ROE(5y)54.53%
ROIC(3y)30.88%
ROIC(5y)27.39%
1.3 Margins
Looking at the Profit Margin, with a value of 10.99%, GWW is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
In the last couple of years the Profit Margin of GWW has grown nicely.
GWW's Operating Margin of 15.27% is fine compared to the rest of the industry. GWW outperforms 76.00% of its industry peers.
GWW's Operating Margin has improved in the last couple of years.
GWW has a better Gross Margin (39.25%) than 76.00% of its industry peers.
In the last couple of years the Gross Margin of GWW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.27% | ||
| PM (TTM) | 10.99% | ||
| GM | 39.25% |
OM growth 3Y9.16%
OM growth 5Y5.04%
PM growth 3Y11.56%
PM growth 5Y8.51%
GM growth 3Y2.79%
GM growth 5Y0.56%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so GWW is creating value.
Compared to 1 year ago, GWW has less shares outstanding
Compared to 5 years ago, GWW has less shares outstanding
GWW has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 11.17 indicates that GWW is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 11.17, GWW belongs to the best of the industry, outperforming 98.00% of the companies in the same industry.
The Debt to FCF ratio of GWW is 1.65, which is an excellent value as it means it would take GWW, only 1.65 years of fcf income to pay off all of its debts.
GWW has a better Debt to FCF ratio (1.65) than 80.00% of its industry peers.
A Debt/Equity ratio of 0.64 indicates that GWW is somewhat dependend on debt financing.
GWW has a Debt to Equity ratio of 0.64. This is comparable to the rest of the industry: GWW outperforms 50.00% of its industry peers.
Although GWW does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 1.65 | ||
| Altman-Z | 11.17 |
ROIC/WACC3.12
WACC9.44%
2.3 Liquidity
GWW has a Current Ratio of 2.82. This indicates that GWW is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of GWW (2.82) is better than 72.00% of its industry peers.
GWW has a Quick Ratio of 1.64. This is a normal value and indicates that GWW is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.64, GWW is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
GWW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.11%.
GWW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.64% yearly.
The Revenue has been growing slightly by 4.35% in the past year.
Measured over the past years, GWW shows a quite strong growth in Revenue. The Revenue has been growing by 8.37% on average per year.
EPS 1Y (TTM)6.11%
EPS 3Y25.23%
EPS 5Y17.64%
EPS Q2Q%2.15%
Revenue 1Y (TTM)4.35%
Revenue growth 3Y9.65%
Revenue growth 5Y8.37%
Sales Q2Q%5.61%
3.2 Future
Based on estimates for the next years, GWW will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.78% on average per year.
Based on estimates for the next years, GWW will show a small growth in Revenue. The Revenue will grow by 7.02% on average per year.
EPS Next Y2.38%
EPS Next 2Y6.94%
EPS Next 3Y8.03%
EPS Next 5Y9.78%
Revenue Next Year4.89%
Revenue Next 2Y5.65%
Revenue Next 3Y5.97%
Revenue Next 5Y7.02%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
GWW is valuated quite expensively with a Price/Earnings ratio of 25.69.
GWW's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of GWW to the average of the S&P500 Index (27.27), we can say GWW is valued inline with the index average.
With a Price/Forward Earnings ratio of 22.73, GWW is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GWW is on the same level as its industry peers.
GWW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.77, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.69 | ||
| Fwd PE | 22.73 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as GWW.
The rest of the industry has a similar Price/Free Cash Flow ratio as GWW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.2 | ||
| EV/EBITDA | 17.07 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates GWW does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of GWW may justify a higher PE ratio.
PEG (NY)10.82
PEG (5Y)1.46
EPS Next 2Y6.94%
EPS Next 3Y8.03%
5. Dividend
5.1 Amount
With a yearly dividend of 0.89%, GWW is not a good candidate for dividend investing.
GWW's Dividend Yield is a higher than the industry average which is at 2.75.
With a Dividend Yield of 0.89, GWW pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
5.2 History
The dividend of GWW is nicely growing with an annual growth rate of 7.57%!
GWW has paid a dividend for at least 10 years, which is a reliable track record.
GWW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.57%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
GWW pays out 22.89% of its income as dividend. This is a sustainable payout ratio.
The dividend of GWW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP22.89%
EPS Next 2Y6.94%
EPS Next 3Y8.03%
1012.62
+8.56 (+0.85%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners74.04%
Inst Owner Change-0.74%
Ins Owners6.08%
Ins Owner Change0.56%
Market Cap48.43B
Analysts66.67
Price Target1048.22 (3.52%)
Short Float %1.79%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
Yearly Dividend8.62
Dividend Growth(5Y)7.57%
DP22.89%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.49%
Min EPS beat(2)-1.9%
Max EPS beat(2)2.89%
EPS beat(4)1
Avg EPS beat(4)-0.59%
Min EPS beat(4)-1.99%
Max EPS beat(4)2.89%
EPS beat(8)4
Avg EPS beat(8)0.56%
EPS beat(12)8
Avg EPS beat(12)2.56%
EPS beat(16)12
Avg EPS beat(16)3.78%
Revenue beat(2)0
Avg Revenue beat(2)-0.83%
Min Revenue beat(2)-1.24%
Max Revenue beat(2)-0.42%
Revenue beat(4)0
Avg Revenue beat(4)-1.04%
Min Revenue beat(4)-1.28%
Max Revenue beat(4)-0.42%
Revenue beat(8)0
Avg Revenue beat(8)-1.34%
Revenue beat(12)1
Avg Revenue beat(12)-1.04%
Revenue beat(16)5
Avg Revenue beat(16)-0.25%
PT rev (1m)-0.49%
PT rev (3m)-4.5%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)-5.57%
EPS NY rev (1m)-2.45%
EPS NY rev (3m)-2.42%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.51%
Revenue NY rev (1m)0.51%
Revenue NY rev (3m)0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.69 | ||
| Fwd PE | 22.73 | ||
| P/S | 2.77 | ||
| P/FCF | 34.2 | ||
| P/OCF | 23.49 | ||
| P/B | 13.18 | ||
| P/tB | 15.92 | ||
| EV/EBITDA | 17.07 |
EPS(TTM)39.41
EY3.89%
EPS(NY)44.55
Fwd EY4.4%
FCF(TTM)29.6
FCFY2.92%
OCF(TTM)43.11
OCFY4.26%
SpS365.48
BVpS76.81
TBVpS63.6
PEG (NY)10.82
PEG (5Y)1.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.51% | ||
| ROE | 52.31% | ||
| ROCE | 38.49% | ||
| ROIC | 29.46% | ||
| ROICexc | 32.23% | ||
| ROICexgc | 35.81% | ||
| OM | 15.27% | ||
| PM (TTM) | 10.99% | ||
| GM | 39.25% | ||
| FCFM | 8.1% |
ROA(3y)21.49%
ROA(5y)18.26%
ROE(3y)59.66%
ROE(5y)54.53%
ROIC(3y)30.88%
ROIC(5y)27.39%
ROICexc(3y)34.68%
ROICexc(5y)30.48%
ROICexgc(3y)38.97%
ROICexgc(5y)34.58%
ROCE(3y)40.34%
ROCE(5y)35.78%
ROICexcg growth 3Y13.79%
ROICexcg growth 5Y5.15%
ROICexc growth 3Y14.65%
ROICexc growth 5Y6.97%
OM growth 3Y9.16%
OM growth 5Y5.04%
PM growth 3Y11.56%
PM growth 5Y8.51%
GM growth 3Y2.79%
GM growth 5Y0.56%
F-Score5
Asset Turnover1.96
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 1.65 | ||
| Debt/EBITDA | 0.8 | ||
| Cap/Depr | 262.6% | ||
| Cap/Sales | 3.7% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.74% | ||
| Profit Quality | 73.67% | ||
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.64 | ||
| Altman-Z | 11.17 |
F-Score5
WACC9.44%
ROIC/WACC3.12
Cap/Depr(3y)184.73%
Cap/Depr(5y)160.05%
Cap/Sales(3y)2.51%
Cap/Sales(5y)2.23%
Profit Quality(3y)79.52%
Profit Quality(5y)87.44%
High Growth Momentum
Growth
EPS 1Y (TTM)6.11%
EPS 3Y25.23%
EPS 5Y17.64%
EPS Q2Q%2.15%
EPS Next Y2.38%
EPS Next 2Y6.94%
EPS Next 3Y8.03%
EPS Next 5Y9.78%
Revenue 1Y (TTM)4.35%
Revenue growth 3Y9.65%
Revenue growth 5Y8.37%
Sales Q2Q%5.61%
Revenue Next Year4.89%
Revenue Next 2Y5.65%
Revenue Next 3Y5.97%
Revenue Next 5Y7.02%
EBIT growth 1Y3.29%
EBIT growth 3Y19.7%
EBIT growth 5Y13.83%
EBIT Next Year11.69%
EBIT Next 3Y9.58%
EBIT Next 5Y8.84%
FCF growth 1Y4.27%
FCF growth 3Y32.04%
FCF growth 5Y13.84%
OCF growth 1Y25.43%
OCF growth 3Y31.09%
OCF growth 5Y15.17%