WW GRAINGER INC (GWW) Stock Fundamental Analysis
NYSE:GWW - US3848021040 - Common Stock
1021.86 USD
+27.79 (+2.8%)
1021.86 USD
0 (0%)
Taking everything into account, GWW scores 6 out of 10 in our fundamental rating. GWW was compared to 48 industry peers in the Trading Companies & Distributors industry. GWW gets an excellent profitability rating and is at the same time showing great financial health properties. While showing a medium growth rate, GWW is valued expensive at the moment. With these ratings, GWW could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
GWW had positive earnings in the past year.
In the past year GWW had a positive cash flow from operations.
Each year in the past 5 years GWW has been profitable.
In the past 5 years GWW always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 21.51%, GWW belongs to the top of the industry, outperforming 97.92% of the companies in the same industry.
GWW's Return On Equity of 52.31% is amongst the best of the industry. GWW outperforms 93.75% of its industry peers.
GWW's Return On Invested Capital of 29.46% is amongst the best of the industry. GWW outperforms 100.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GWW is significantly above the industry average of 9.78%.
| 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
GWW's Profit Margin of 10.99% is fine compared to the rest of the industry. GWW outperforms 77.08% of its industry peers.
In the last couple of years the Profit Margin of GWW has grown nicely.
With a decent Operating Margin value of 15.27%, GWW is doing good in the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Operating Margin of GWW has grown nicely.
Looking at the Gross Margin, with a value of 39.25%, GWW is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
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.
GWW has less shares outstanding than it did 1 year ago.
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 11.26 indicates that GWW is not in any danger for bankruptcy at the moment.
GWW has a Altman-Z score of 11.26. This is amongst the best in the industry. GWW outperforms 97.92% of its industry peers.
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.
The Debt to FCF ratio of GWW (1.65) is better than 81.25% of its industry peers.
GWW has a Debt/Equity ratio of 0.64. This is a neutral value indicating GWW is somewhat dependend on debt financing.
GWW's Debt to Equity ratio of 0.64 is in line compared 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 | 11.26 |
ROIC/WACC3.11
WACC9.47%
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.
GWW's Current ratio of 2.82 is fine compared to the rest of the industry. GWW outperforms 75.00% 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.
GWW's Quick ratio of 1.64 is fine compared to the rest of the industry. GWW outperforms 68.75% of its industry peers.
| 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%.
The Earnings Per Share has been growing by 17.64% on average over the past years. This is quite good.
The Revenue has been growing slightly by 4.35% in the past year.
GWW shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.37% yearly.
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
GWW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.78% yearly.
The Revenue is expected to grow by 7.02% on average over the next years.
EPS Next Y2.38%
EPS Next 2Y6.94%
EPS Next 3Y8.03%
EPS Next 5Y9.78%
Revenue Next Year4.87%
Revenue Next 2Y5.62%
Revenue Next 3Y5.97%
Revenue Next 5Y7.02%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.93 indicates a quite expensive valuation of GWW.
Compared to the rest of the industry, the Price/Earnings ratio of GWW is on the same level as its industry peers.
When comparing the Price/Earnings ratio of GWW to the average of the S&P500 Index (27.24), we can say GWW is valued inline with the index average.
With a Price/Forward Earnings ratio of 22.94, GWW is valued on the expensive side.
Based on the Price/Forward Earnings ratio, GWW is valued a bit more expensive than 60.42% of the companies in the same industry.
GWW's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.93 | ||
| Fwd PE | 22.94 |
4.2 Price Multiples
60.42% of the companies in the same industry are cheaper than GWW, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GWW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.52 | ||
| EV/EBITDA | 17.37 |
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)10.92
PEG (5Y)1.47
EPS Next 2Y6.94%
EPS Next 3Y8.03%
5. Dividend
5.1 Amount
GWW has a yearly dividend return of 0.91%, which is pretty low.
GWW's Dividend Yield is a higher than the industry average which is at 2.38.
Compared to an average S&P500 Dividend Yield of 2.32, GWW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.91% |
5.2 History
On average, the dividend of GWW grows each year by 7.57%, which is quite nice.
GWW has been paying a dividend for at least 10 years, so it has 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
22.89% of the earnings are spent on dividend by GWW. This is a low number and sustainable payout ratio.
GWW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP22.89%
EPS Next 2Y6.94%
EPS Next 3Y8.03%
1021.86
+27.79 (+2.8%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners74.04%
Inst Owner Change-0.75%
Ins Owners6.08%
Ins Owner Change0.58%
Market Cap48.88B
Analysts66.96
Price Target1048.22 (2.58%)
Short Float %2.16%
Short Ratio3.13
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.91% |
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)-4.37%
PT rev (3m)-2.37%
EPS NQ rev (1m)-5.76%
EPS NQ rev (3m)-6.78%
EPS NY rev (1m)-2.45%
EPS NY rev (3m)-2.42%
Revenue NQ rev (1m)0.43%
Revenue NQ rev (3m)0.6%
Revenue NY rev (1m)0.53%
Revenue NY rev (3m)0.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.93 | ||
| Fwd PE | 22.94 | ||
| P/S | 2.8 | ||
| P/FCF | 34.52 | ||
| P/OCF | 23.7 | ||
| P/B | 13.3 | ||
| P/tB | 16.07 | ||
| EV/EBITDA | 17.37 |
EPS(TTM)39.41
EY3.86%
EPS(NY)44.55
Fwd EY4.36%
FCF(TTM)29.6
FCFY2.9%
OCF(TTM)43.11
OCFY4.22%
SpS365.48
BVpS76.81
TBVpS63.6
PEG (NY)10.92
PEG (5Y)1.47
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 | 11.26 |
F-Score5
WACC9.47%
ROIC/WACC3.11
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 Year4.87%
Revenue Next 2Y5.62%
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%